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Petra Diamonds agrees restructuring terms with noteholders and South African lenders

Credit: REUTERS/SIPHIWE SIBEKO1

Africa-focused miner Petra Diamonds said on Tuesday it had an agreement with its noteholders and lenders to restructure the group and was abandoning a formal sale process after receiving no viable offers for the company.

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Oct 20 (Reuters) - Africa-focused miner Petra Diamonds PDL.L said on Tuesday it had an agreement with its noteholders and lenders to restructure the group and was abandoning a formal sale process after receiving no viable offers for the company.

The diamond miner, which put itself up for sale in June as part of the restructuring process, said the agreement in principle included taking on new debt and converting debt to equity.

Noteholders will each contribute $30 million in new money in the form of senior secured second lien notes - expected to amount to around $337 million.

The remaining notes would be converted into equity, resulting in the noteholders together holding 91% of the expanded shares - leaving 9% with existing shareholders.

Petra said it expects to seal a "lock-up agreement" cementing these terms with the noteholders group and the South African lenders in early November. It expects the restructuring to become effective in the first quarter of 2021.

The agreement also includes new governance arrangements and cashflow controls.

"We would like to thank both the AHG [ad-hoc group of noteholders] and South African lender group for their ongoing support and commitment to the Company, which they have demonstrated by agreeing in principle to provide meaningful additional liquidity to the Company during this difficult period," said Petra Diamonds Chief Executive Richard Duffy.

(Reporting by Helen Reid in Johannesburg and Yadarisa Shabong in Bengaluru; Editing by Sriraj Kalluvila and Louise Heavens)

((Yadarisa.Shabong@thomsonreuters.com; Twitter: https://twitter.com/Yadarisa; +919742735150;))

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