Amendment to Covenant Measurement

RNS Number : 4165H

Petra Diamonds Limited

30 November 2015

 

30 November 2015

LSE: PDL

Petra Diamonds Limited

("Petra", the "Group" or the "Company")

Amendment to Covenant Measurement for Banking Facilities

Petra Diamonds Limited announces that its lender group, including Absa Bank Limited (acting through its Corporate and Investment Banking division) ("ABSA"), FirstRand Bank Limited (acting through its Rand Merchant Bank division) ("RMB"), IFC (a member of the World Bank Group) and Nedbank Limited (acting through its Corporate and Investment Banking division) ("Nedbank") (together the "Lender Group"), has agreed to waive the measurement of  the two covenant tests related to consolidated EBITDA for the period to, and as at, 31 December 2015.

The Lender Group has advised Petra that it remains very supportive of the Company and its expansion plans.

The Group continues to focus on production (reporting record production for Q1 FY 2016), control of costs and access to undiluted ore, with the expansion programmes at both Cullinan and Finsch remaining on track (on time and on budget). Taking into account current trading conditions, together with the significant benefit to Petra's Rand cashflows of the weaker Rand/US Dollar exchange rate, Petra remains well financed for the completion of its capital expansion programmes.

As the Company accesses undiluted ore from H2 (January to June) FY 2016 (thereby contributing higher grade tonnes and a higher quality product mix), further increases in production and a reduction in Capex (from FY 2017) are expected to see the Group's net debt return to lower levels.

The Lender Group commented:

"The lenders remain fully supportive of Petra during the current commodity cycle and also of its plans to achieve its stated objective of being a 5 million carats per annum diamond producer by 2019."

Johan Dippenaar, Chief Executive Officer, commented:

"The agreement of our Lender Group to waive the measurement of the December 2015 EBITDA related financial covenants validates its support of Petra's business and its strategy. Petra remains focused on maintaining a healthy balance sheet to enable it to successfully conclude its expansion programmes which remain on track, with the majority of work having already been completed."

Notes

1.     The covenants² under Petra's banking facilities are measured twice a year, on a last twelve months rolling basis, effective 31 December and 30 June.

2.     Bank covenants are;

(i)            Consolidated EBITDA to consolidated net finance charges of not less than 4x

(ii)           Consolidated net debt to consolidated EBITDA of 2.5x or less

(iii)          Consolidated net debt to book equity (for the period to 30 June 2016) of 0.75x or less; and consolidated net debt to book equity (for the period after 1 July 2016) of 0.5x or less.

Net debt includes the BEE guarantees of ZAR 1.2 billion (US$85.6 million) as at 30 September 2015, issued by Petra to the lenders as part of the BEE financing concluded in December 2014.

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For further information, please contact:

Petra Diamonds, London                                         Telephone: [phone]

Cathy Malins                                                               [e-mail]

Cornelia Grant                                                             [e-mail]

Buchanan                                                                  Telephone: [phone]

(PR Adviser)

Bobby Morse                                                               [e-mail]

Anna Michniewicz                                                       [e-mail]

RBC Capital Markets                                               Telephone: [phone]

(Joint Broker)

Matthew Coakes                                                         [e-mail]

Jonathan Hardy                                                           [e-mail]

Barclays                                                                     Telephone: [phone]

(Joint Broker)

Bertie Whitehead                                                        [e-mail]

Philip Drake                                                                 [e-mail]

About Petra Diamonds Limited

Petra Diamonds is a leading independent diamond mining group and an increasingly important supplier of rough diamonds to the international market. The Company has interests in five producing mines: four in South Africa (Finsch, Cullinan, Koffiefontein and Kimberley Underground) and one in Tanzania (Williamson). It also maintains an exploration programme in Botswana.

Petra has a core objective to steadily increase annual production to ca. 5 million carats by FY 2019. The Group has a significant resource base of ca. 300 million carats.

Petra conducts all operations according to the highest ethical standards and will only operate in countries which are members of the Kimberley Process. Petra is quoted with a premium listing on the Main Market of the London Stock Exchange under the ticker 'PDL' and is a member of the FTSE 250. For more information, visit the Company's website at www.petradiamonds.com. 

 

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