INTERNATIONAL - Petra Diamonds said on Tuesday that it has finalised an agreement with its lenders for a waiver of its December 2017 debt covenant and a resetting of debt agreements for this year.
The London-listed miner started talks with its banks earlier this year after the confiscation of a consignment of its diamonds by Tanzania and a labour strike at its South African mines put it at risk of falling short of its loan obligations.
Tanzania accused Petra of underdeclaring the value of the diamonds, in a move that was seen as part of the country’s crackdown on the mining industry to reap more revenue from its minerals.
Petra has denied any wrongdoing and has said the consignment has not been released.
The talks with banks centred on the debt arrangement relating to Petra’s EBITDA for December 2017, which has now been waived, and to the covenant concerning its EBITDA for June and December this year, which have been reset under the deal.
The new debt covenants struck with Absa Bank, Nedbank, Firstrand Bank and Investec Asset Management allow for the interest rate on the loans to increase by up to two percent depending on by how much the ratio of Petra’s net debt to consolidated EBITDA is breached.
“The finalisation of this agreement with our Lender Group validates its support of Petra’s business and strategy, as we negotiate this final stretch of our expansion programmes,” Chief Executive Officer Johan Dippenaar said in the statement.