Tender Offer

13 September 2022

LSE: PDL

Petra Diamonds Limited
(“Petra”)

Petra’s wholly owned subsidiary, Petra Diamonds US$ Treasury Plc, has today made the following announcement on the Irish Stock Exchange:

FOR IMMEDIATE RELEASE

This announcement is not an invitation to participate in a tender offer with respect to any Notes (as defined below). The Offer (as defined below) is being made solely pursuant to the Tender Offer Memorandum (as defined below) which sets forth the complete terms of the Offer.

This announcement and any materials relating to the Offer do not constitute, and may not be used in connection with, any form of offer or solicitation in any place where such offers or solicitations are not permitted by law.

The distribution of this announcement in certain jurisdictions may be restricted by law. Persons into whose possession this announcement comes are required to inform themselves about, and to observe, any such restrictions.

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF YOU ARE IN DOUBT ABOUT THE ACTION YOU SHOULD TAKE, YOU SHOULD CONSULT IMMEDIATELY YOUR STOCKBROKER, BANK MANAGER, SOLICITOR, ACCOUNTANT OR APPROPRIATELY AUTHORISED INDEPENDENT FINANCIAL ADVISER.

Petra Diamonds US$ Treasury Plc

Company Number: 09518557

(the "Offeror")

Announces an Offer to Purchase for Cash in a Modified Dutch Auction up to $150,000,000 in aggregate total cash consideration of its outstanding $336,656,000 in aggregate notional principal amount of Senior Secured Second Lien Notes due 2026

(ISIN No. XS2289899242, Common Code 228989924 (Private Placement))
(ISIN No. XS2289895927, Common Code 228989592 (Regulation S))

13 September 2022

Petra Diamonds US$ Treasury Plc (the "Offeror") has today launched an offer (the "Offer") to holders (the "Noteholders") to submit tenders to sell to the Offeror for cash the $336,656,000 Senior Secured Second Lien Notes due 2026 (the "Notes") up to a maximum consideration of $150,000,000 (the "Acceptance Consideration"), subject to the offer and distribution restrictions set out below, and upon the terms and subject to the conditions set forth in a tender offer memorandum dated September 13, 2022 (as it may be amended or supplemented from time to time, the "Tender Offer Memorandum") in accordance with a modified Dutch auction procedure.

Capitalised terms used in this announcement but not otherwise defined have the meanings given to them in the Tender Offer Memorandum. Copies of the Tender Offer Memorandum are available, subject to the offer and distribution restrictions and registration, from the Offer Website: https://deals.is.kroll.com/petradiamonds.

Summary of the Offer

Description of the Notes	ISIN/Common Code	Outstanding Notional Principal Amount (1)	Early Tender Premium (2)(3)	Total Consideration (2)(3)	Total Consideration Acceptable Bid Range (2)(3)
$336,656,000 in aggregate notional principal amount of Senior Secured Second Lien Notes due 2026 (the “Notes”)	Private Placement: ISIN: XS2289899242 Common code: 228989924	$336,656,000	$50	To be determined pursuant to a modified Dutch auction procedure	$970 to $1,010
	Regulation S: ISIN: XS2289895927 Common code: 228989592

(1) Represents the notional outstanding principal amount. The actual principal amount after application of a pool factor of 1.14362 is $385,006,534.72. Unless stated otherwise, all references to outstanding principal in this announcement are to the notional outstanding principal amount prior to the application of the pool factor.

(2) Per $1,000 of principal amount of Notes.

(3) Total Consideration per $1,000 of principal amount of Notes includes the Early Tender Premium and will be multiplied by the pool factor of 1.14362. Total Consideration will only be paid to Noteholders validly tendering their Notes at or prior to the Early Participation Deadline and accepted by the Offeror. Noteholders validly tendering their Notes after the Early Participation Deadline and accepted by the Offeror will receive the Tender Consideration, which is equal to the Total Consideration minus the Early Tender Premium.

The Offeror intends to accept for purchase validly tendered Notes up to the Acceptance Consideration. Acceptance of Notes tendered may be subject to scaling as described herein. The Offeror reserves the right, in its sole and absolute discretion, to amend the Acceptance Consideration to accept significantly more than or significantly less than the Acceptance Consideration, or to accept none of such Notes, for purchase pursuant to the Offer, not to accept any tender or purchase Notes or to modify in any manner any of the terms and conditions of the Offer.

Tender Instructions submitted on or prior to the Early Participation Deadline will be accepted in priority to those Tender Instructions submitted after the Early Participation Deadline.

Assuming the Acceptance Consideration has not been met at the Early Participation Deadline, Noteholders validly tendering their Notes after the Early Participation Deadline but on or prior to the Expiration Deadline will only be eligible to receive the Tender Consideration. The Offeror may choose not to accept any Tender Instructions submitted after the Early Participation Deadline. No accrued interest will be payable in addition to the Total Consideration.

No accrued interest will be payable in addition to the Total Consideration or, with respect to Tender Instructions submitted after the Early Participation Deadline, the Tender Consideration.

Rationale for the Offer

The purpose of the Offer is to enable the Offeror to manage its overall funding level and to reduce its gross debt, while maintaining a prudent approach to liquidity.

Total Consideration

The Offeror will pay per $1,000 of principal amount (to be multiplied by a pool factor of 1.14362 (the "Pool Factor")) of the Notes validly tendered and accepted by it for purchase pursuant to the Offer a cash purchase price (the “Total Consideration”), as determined pursuant to the Modified Dutch Auction Procedure, as defined below. The Total Consideration will be not less than $970 (the “Minimum Total Consideration”) nor more than $1,010 (the “Maximum Total Consideration”) per $1,000 of principal amount of the Notes and shall be an amount that is a multiple of $1,000. The Total Consideration is inclusive of the Early Tender Premium of $50 per $1,000 of principal amount of the Notes. Such Total Consideration is payable only to the Noteholders who validly tender their Notes prior to the Early Participation Deadline and the Offeror accepts such validly tendered Notes for purchase. No accrued interest will be payable.

No Accrued Interest

No accrued interest will be payable in addition to the Total Consideration or, with respect to Tender Instructions submitted after the Early Participation Deadline, the Tender Consideration.

Modified Dutch Auction Procedure

The amount that the Offeror will pay per $1,000 of principal amount of the Notes validly tendered and accepted for purchase pursuant to the Offer will be determined pursuant to a modified Dutch auction procedure (the “Modified Dutch Auction Procedure”).

Under the Modified Dutch Auction Procedure, the Offeror will determine, in its sole discretion, for the Notes tendered prior to the Early Participation Deadline, as soon as practicable following the Early Participation Deadline, (a) the Acceptance Consideration and (b) the Total Consideration (expressed as the amount payable per $1,000 of principal amount of Notes), taking into account the principal amount of the Notes so tendered and the Total Consideration Bid Prices specified (or deemed to be specified, as set out below) by tendering Noteholders.

The Total Consideration for the Notes will represent the lowest price that will enable the Offeror to purchase an aggregate principal amount of the Notes for which the total consideration paid by the Offeror will not exceed the Acceptance Consideration and shall be an amount that is a multiple of $1.00.

If the total amount of Tender Instructions received by the Offeror is less than the Acceptance Consideration, then the Total Consideration will be equivalent to the Maximum Total Consideration.

Tender Instructions may be submitted in the form of either a Competitive Offer or a Non-Competitive Offer. Competitive Offers can only be submitted prior to the Early Participation Deadline.

Competitive Offers

Noteholders may submit one or more Competitive Offers in respect of the Notes on or prior to the Early Participation Deadline, provided that the aggregate principal amount of the Notes that are the subject of these Competitive Offers, together with the aggregate principal amount of the Notes that are the subject of any Non-Competitive Offers submitted by each such Noteholder, does not exceed the aggregate principal amount of the Notes that each such Noteholder holds. Competitive Offers must specify:

1. a purchase price per $1,000 of aggregate principal amount of the Notes, in increments of $1.00, which is above the Minimum Total Consideration and at or below the Maximum Total Consideration, that such Noteholder would be willing to accept as the Total Consideration in respect of Notes that are the subject of the particular Tender Instruction (the “Total Consideration Bid Price”); and
2. the principal amount of the Notes, in minimum denomination of $1,000 and in integral multiples of $1.00 in excess thereof, that the relevant Noteholder is tendering at that Total Consideration Bid Price.

If a Competitive Offer specifies a purchase price that is not in increments of $1.00, such purchase price will be rounded up to the nearest number divisible by $1.00.

If the Offeror accepts a Competitive Offer (or Competitive Offers), the relevant Noteholder will receive the Total Consideration for the Notes. In respect of each Competitive Offer (or Competitive Offers) that is accepted, the Offeror will pay the Total Consideration to each Noteholder whose Competitive Offer of Notes is accepted, even if the Total Consideration is higher than the Total Consideration Bid Offer Price specified by the tendering Noteholder in its Tender Instruction. In the event that the Competitive Offers submitted at the Total Consideration (following acceptance of all Non-Competitive Offers as described below) result in more Notes being offered than the Acceptance Consideration, such Competitive Offers will be accepted on a pro rata basis, as described below.

Non-Competitive Offers

Alternatively, Noteholders may submit one or more Non-Competitive Offers in respect of the Notes on or prior to the Expiration Deadline. Non-Competitive Offers must specify the principal amount of the Notes, in minimum denomination of $1,000 and in integral multiples of $1.00 in excess thereof, that the relevant Noteholder is offering pursuant to such Non-Competitive Offer, provided that the aggregate principal amount of the Notes that are the subject of these Non-Competitive Offers, together with the aggregate principal amount of the Notes that are the subject of any Competitive Offers submitted by each such Noteholder, does not exceed the aggregate principal amount of the Notes that each such Noteholder holds.

Tender Instructions that (i) do not specify a Total Consideration Bid Price, (ii) specify a Total Consideration Bid Price equal to the Minimum Total Consideration or (iii) are received after the Early Participation Deadline will be treated as Non-Competitive Offers. Each Non-Competitive Offer falling within (i) or (ii) above, if received on or prior to the Early Participation Deadline, will be deemed to have specified the Minimum Total Consideration. Each Non-Competitive Offer submitted after the Early Participation Deadline will be deemed to have specified the Tender Consideration. Tender Instructions which specify a Total Consideration Bid Price more than the Maximum Total Consideration or less than the Minimum Total Consideration will not be accepted.

A separate Tender Instruction must be submitted on behalf of each beneficial owner of the Notes due to possible scaling.

The Offeror will accept all Non-Competitive Offers if it accepts any Competitive Offers. If the Offeror accepts a Non-Competitive Offer, the relevant Noteholder will receive the Total Consideration for the Notes (or, if such Non-Competitive Offer was submitted after the Early Participation Deadline, the Tender Consideration). In the event that the Non-Competitive Offers submitted would result in total consideration paid by the Offeror that is higher than the Acceptance Consideration, such Non-Competitive Offers will be accepted on a pro rata basis, as described below.

Acceptance of Tender Instructions

Once the Offeror has determined the Total Consideration and the Acceptance Consideration for the Notes, the Offeror will accept Tender Instructions validly submitted on or prior to the Early Participation Deadline in the following order:

1. all validly submitted Non-Competitive Offers will be accepted first, subject to possible scaling in the event that Tender Instructions in respect of such Non-Competitive Offers have been submitted that would result in a greater total consideration paid by the Offeror than the Acceptance Consideration;
2. all validly submitted Competitive Offers that specify Total Consideration Bid Prices lower than the Total Consideration will be accepted second; and
3. all validly submitted Competitive Offers that specify Total Consideration Bid Prices equal to the Total Consideration will be accepted third, subject to possible scaling in the event that such Competitive Offers, when aggregated with all Tender Instructions referred to above and accepted for purchase, would result in a greater total consideration paid by the Offeror than the Acceptance Consideration.

Such pro rata allocations will be calculated by multiplying the aggregate principal amount of the Notes represented by each Tender Instruction subject to scaling by a factor (the “Scaling Factor”) derived from (i) the maximum amount of notes that could be purchased taking into account the Acceptance Consideration less the aggregate principal amount of the Notes accepted for purchase not subject to scaling, divided by (ii) the aggregate principal amount of the Notes validly tendered in the Offer that are subject to scaling. Each tender of Notes reduced in this manner will be rounded down to the nearest $1.00 in aggregate notional principal amount. In the event of any scaling on a pro rata basis and such scaling would result in either (i) the Offeror accepting Notes from the relevant Noteholder in an aggregate principal amount of less than $1,000 or (ii) the principal amount of Notes not purchased and returned back to the relevant Noteholder being an aggregate principal amount of less than $1,000, the Offeror may elect to accept or reject such Tender Instructions in full.

If the Offeror accepts tenders of Notes for purchase on a pro rata basis, Noteholders will only receive the Total Consideration (or, with respect to Tender Instructions submitted after the Early Participation Deadline, the Tender Consideration) in respect of those Notes validly tendered and accepted for purchase by the Offeror. All Notes not accepted as a result of scaling will be returned to Noteholders.

If at the Early Participation Deadline the aggregate principal amount of Notes validly tendered  by Noteholders would result in a greater total consideration paid by the Offeror than the Acceptance Consideration, the Offeror may not accept any Notes tendered by Noteholders after the Early Participation Deadline. In such case, any Notes tendered after the Early Participation Deadline and on or prior to the Expiration Deadline will not be accepted for purchase by the Offeror and shall be promptly returned without cost to the tendering Noteholder. If the Offer is oversubscribed at the Early Participation Deadline, then the Offeror will issue an announcement promptly after the Early Participation Deadline stating that Notes tendered after the Early Participation Deadline will not be purchased pursuant to the Offer and Notes tendered before the Early Participation Deadline may be subject to scaling.

If at the Early Participation Deadline the aggregate principal amount of Notes validly tendered by Noteholders would result in a total consideration paid by the Offeror that is less than the Acceptance Consideration, the Offeror expects to accept for purchase all Notes validly tendered at or prior to the Early Participation Deadline without scaling, subject to the satisfaction or waiver of the Transaction Conditions set forth in this Tender Offer Memorandum. In such case, the Offeror also expects to accept for purchase Notes validly tendered after the Early Participation Deadline and on or prior to the Expiration Deadline, up to a total consideration paid by the Offeror equal to the Acceptance Consideration, and only Notes tendered after the Early Participation Deadline and on or prior to the Expiration Deadline, to the extent that the aggregate principal amount of all Notes tendered as of the Expiration Deadline would result in a greater total consideration paid by the Offeror than the Acceptance Consideration, will be subject to scaling.

If the Offeror decides to increase or decrease the Acceptance Consideration or adjust the Early Tender Premium, it will announce any such change during the pendency of the Offer. If the Acceptance Consideration is increased or decreased or the Early Tender Premium is adjusted and there are fewer than 10 Business Days until the scheduled Expiration Deadline, the Offeror will extend the Offer so that at least 10 Business Days remain until the Expiration Deadline.

Notes offered for purchase at a Total Consideration Bid Price higher than the Total Consideration of the Notes will not be accepted pursuant to the Offer. The Offeror may elect not to purchase any Notes.

The determination of the Total Consideration by the Offeror will, in the absence of manifest error, be final and binding on all parties.

Early Tender Premium

Any Noteholder who validly tenders its Notes prior to the Early Participation Deadline will be entitled to receive a fee of $50 per $1,000 of principal amount of Notes for the Notes accepted for purchase in the Offer (the “Early Tender Premium”), with such Early Tender Premium included in the Total Consideration and payable on the Early Settlement Date. Noteholders whose Notes are not accepted for purchase or who validly tender their Notes after the Early Participation Deadline, but prior to the Expiration Deadline, assuming the Acceptance Consideration has not been met, will be eligible to receive the Tender Consideration, and will not receive any other additional cash consideration.

Further Information

The Offeror has appointed Kroll Issuer Services Limited to act as Information and Tender Agent. The Tender Offer Memorandum and all announcements and supporting documentation in relation to the Offer will be posted on the website operated by the Information and Tender Agent for purposes of the Offer (the "Offer Website"): https://deals.is.kroll.com/petradiamonds 

An indicative timeline for the Offer is set out below:

Commencement of the Offer:	September 13, 2022
Early Participation Deadline:	September 26, 2022 at 5:00 p.m. London time
Early Results Announcement:	On or about September 27, 2022
Early Settlement Date:	On or about September 28, 2022
Expiration Deadline:	October 11, 2022 at 5:00 p.m. London time
Final Announcement Date:	On or about October 12, 2022
Final Settlement Date	On or about October 13, 2022

Noteholders are advised to check with any bank, securities broker or other Intermediary through which they hold Notes when such Intermediary would require the receipt of instructions from a Noteholder in order for that Noteholder to be able to participate in, or (in the limited circumstances in which revocation is permitted) revoke their instruction to participate in, the Offer before the deadlines specified above. The deadlines set by any such Intermediary and each Clearing System for the submission of Tender Instructions will be earlier than the relevant deadlines specified above.

The Offeror has the right to extend, amend or terminate the Offer at any time before the Expiration Deadline.

The Offer is being made solely by means of the Tender Offer Memorandum, dated September 13, 2022, which sets forth the complete terms of the Offer. Noteholders are advised to read the Tender Offer Memorandum carefully and in full for details of, and information on the procedures for participating in, the Offer.

Noteholders whose notes are held on their behalf by a broker, dealer, commercial bank, custodian, trust company or accountholder must contact and request such broker, dealer, commercial bank, custodian, trust company or accountholder if they wish to participate in the Offer.

NONE OF THE OFFEROR OR ITS AFFILIATES, THE TRUSTEE OR THE INFORMATION AND TENDER AGENT MAKES ANY RECOMMENDATION AS TO WHETHER OR NOT NOTEHOLDERS SHOULD TENDER THEIR NOTES. EACH NOTEHOLDER MUST MAKE HIS, HER OR ITS OWN DECISION AS TO WHETHER TO TENDER NOTES. NOTEHOLDERS ARE URGED TO EVALUATE CAREFULLY ALL OF THE INFORMATION IN THE TENDER OFFER MEMORANDUM AND TO CONSULT THEIR INVESTMENT AND TAX ADVISORS IN MAKING THEIR DECISION AS TO WHETHER TO TENDER THEIR NOTES.

Absa Bank Limited and Merrill Lynch International are acting as Dealer Managers for the Offer (the “Dealer Managers”).

The Offeror is a wholly-owned subsidiary of Petra Diamonds Limited (“PDL”). PDL's shares are listed on the premium listing segment of the Official List maintained by the Financial Conduct Authority (the “FCA”) and traded on the London Stock Exchange's main market for listed securities. Accordingly, PDL is subject to and must comply with the Listing Rules (as defined in the Tender Offer Memorandum). The Listing Rules regulate transactions that constitute Related Party Transactions (as defined in Chapter 11 of the Listing Rules), which can include a transaction between the Offeror, being a subsidiary of PDL, and a Substantial Shareholder (as defined in the Tender Offer Memorandum) of PDL. The Offeror makes no offer to Noteholders to the extent the purchase by the Offeror of Notes (or a certain portion of Notes) from a Noteholder would be a transaction to which Chapter 11 of the Listing Rules would apply. Accordingly, the Offer is restricted by the RPT Condition (as defined in the Tender Offer Memorandum) and the RPT Condition must be satisfied (or waived) in order for a Noteholder’s Notes to be validly tendered. The Offeror reserves the right, in its sole and absolute discretion, to refuse any Notes tendered by Noteholders in the event the purchase of those Notes by the Offeror would constitute a transaction to which Chapter 11 of the Listing Rules would apply.

Any questions and requests for assistance concerning the terms of the Offer may be directed to the Dealer Managers at the telephone number and location listed below:

Absa Bank Limited
15 Alice Lane
Sandton
Johannesburg 2196
South Africa

Telephone: [phone]
Attention: Simon Rankin
Email: [e-mail]

Merrill Lynch International
2 King Edward Street
London EC1A 1HQ
United Kingdom

United Kingdom Telephone (Europe): [phone]
Telephone (U.S. Toll Free): [phone]
Telephone (U.S.): [phone]
Attention: Liability Management Group
Email: [e-mail]

Any questions and requests for additional copies of the Tender Offer Memorandum may be directed to the Information and Tender Agent at the telephone number and location listed below:

Kroll Issuer Services Limited

The Shard

32 London Bridge Street

London SE1 9SG

United Kingdom

Telephone: [phone]
Attention: Thomas Choquet
Email: [e-mail]
Offer Website: https://deals.is.kroll.com/petradiamonds

Forward-Looking Statements

This announcement contains certain forward-looking statements, which are based on current intentions, beliefs, assumptions and estimates by the management of the Offeror concerning, among other things, results of operations, financial condition, liquidity, prospects, growth, strategies of PDL and its subsidiaries (the "Group") and the industries in which the Group operates. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Readers are cautioned that forward-looking statements are not guarantees of future performance and that the Group’s actual results of operations, financial condition and liquidity, and the development of the industries in which it operates, may differ materially from those made in or suggested by the forward-looking statements contained in this announcement. In addition, even if the Group’s or its affiliates’ results of operations, financial condition and liquidity and the development of the industries in which it operates are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. The Offeror undertakes no obligation to update these forward-looking statements and will not publicly release any revisions that may be made to these forward-looking statements which may result from events or circumstances arising after the date of this announcement.

This announcement includes inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 and is being released on behalf of PDL by the Company Secretary.

~ Ends ~

For further information, please contact:

Petra Diamonds, London   Telephone: [phone]

Patrick Pittaway   [e-mail] 

Jill Sherratt

Julia Stone

About Petra Diamonds Limited

Petra Diamonds is a leading independent diamond mining group and a supplier of gem quality rough diamonds to the international market. The Group’s portfolio incorporates interests in three underground producing mines in South Africa (Finsch, Cullinan Mine and Koffiefontein) and one open pit mine in Tanzania (Williamson).

Petra's strategy is to focus on value rather than volume production by optimising recoveries from its high-quality asset base in order to maximise their efficiency and profitability. The Group has a significant resource base of ca. 226.6 million carats, which supports the potential for long-life operations.

Petra strives to conduct all operations according to the highest ethical standards and only operates in countries which are members of the Kimberley Process. The Group aims to generate tangible value for each of its stakeholders, thereby contributing to the socio-economic development of its host countries and supporting long-term sustainable operations to the benefit of its employees, partners and communities.

Petra is quoted with a premium listing on the Main Market of the London Stock Exchange under the ticker 'PDL'. The Group’s US$336.7 million notes due in 2026 are listed on the Irish Stock Exchange and admitted to trading on the Global Exchange Market. For more information, visit www.petradiamonds.com.