Sold two large Cullinan diamonds for $2.8 mln
Petra plans $100 mln placing to double mine stake
Has option to double stake in Cullinan mine to 74 pct
November 18, 2009
Petra Diamonds plans to raise about $100 million (R746 million) in an equity fundraising so it can double its stake in the Cullinan mine in South Africa and cut debt, it said on Wednesday.
The fundraising -- led by Canaccord Adams and RBC Capital Markets -- will enable Petra to exercise an option to double its stake in Cullinan to 74 percent, a statement said.
Under an option agreement, Petra can buy a 37 percent stake held by Al Rajhi Holdings until Dec. 18.
If shareholders do not approve the plan to boost the stake in Cullinan, then the fundraising would be "significantly less" a spokewoman said.
In September, Petra said it had extended the maturity date of its $20 million bond issued to Al Rajhi.
"The company is undertaking the placing in order to exercise the option, strengthen its balance sheet by reducing its debt, implement development programmes at Cullinan and Williamson in order to increase production, and improve liquidity by broadening the shareholder base," the statement said.
Petra has interests in five producing mines in South Africa and the Williamson mine in Tanzania.
Petra also said it had sold two Cullinan white diamonds of 58 and 53 carats in early November for $2.8 million and that rough diamond prices have strengthened since June. - Reuters
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