Extension of US$20 million Co

RNS Number : 2732Z

Petra Diamonds Ld

18 September 2009

 



Immediate Release

18 September 2009

Petra Diamonds Limited

Extension of US$20 million Convertible Bond 

Petra Diamonds Limited ('Petra' or 'the Company'), the international diamond mining group, announces that the maturity date of the US$20 million convertible bond that was issued to Al Rajhi Holdings W.L.L. ('Al Rajhi') on 18 September 2006 ('the 2006 Convertible') has been extended until 18 March 2011 on the amended terms highlighted below ('the 2009 Convertible').

Petra continues to closely manage its cash position and will provide a full update on current trading and its financial position at the end of September when it announces results for the year to 30 June 2009.

Highlights

• For the period from 19 September 2009 to 18 December 2009 only, a coupon of 9.5% per annum (payable in cash, calculated to the earlier of 18 December 2009, conversion by Al Rajhi or repayment by Petra) will be applied on the US$20 million principal bond amount.

• During the period from 19 September 2009 to 18 December 2009 the US$20 million principal may be converted, at Al Rajhi's election, into Petra shares at a strike price of 85 pence per share.

• If Petra does not repay the US$20 million principal by 18 December 2009 and Al Rajhi does not convert at the 85 pence per share as noted above, then the US$20 million convertible bond will be automatically extended and the terms from 19 December will be:

a)       the 2009 Convertible will be extended for an additional 15 month period, from 18 December 2009 until 18 March 2011 (therefore the total extension will be 18 months). During this 15 month period the Convertible will carry no coupon;

 

b)       the strike price from 18 December 2009 will be 65 pence per share; and

 

c)       Petra will grant to Al Rajhi warrants over six million shares, exercisable at 65 pence per share and exercisable until 18 March 2011 (“the 2009 Warrants”). If Petra repays the US$ 20 million principal after 18 December 2009 but before March 2011, or if Al Rajhi converts the 2009 Convertible into Petra shares, the 2009 Warrants will remain in place until 18 March 2011.

Johan Dippenaar, Petra's Chief Executive Officer, commented: 'The extension of the convertible with the Al Rajhi group removes the requirement to repay the US$20 million now and therefore provides Petra with substantially increased financial flexibility.  We look forward to Al Rajhi's continued support and to working with them as shareholders and our partners in the Cullinan mine.' 

Details of the Convertible Amendment and Warrant

As Petra's treasury does not allow for the repayment of the 2006 Convertible by 5 October 2009 (the date 36 months from the drawdown of the 2006 Convertible), Petra and Al Rajhi have agreed the terms to the extension of the 2006 Convertible, as set out in the highlights above.

The original 2006 Convertible was unsecured, interest free, and convertible at the election of Al Rajhi into Petra ordinary shares at a price of 130 pence per share. As there was no interest chargeable on the 2006 Convertible, Petra granted Al Rajhi warrants at the date of issue of the 2006 Convertible over two million Petra ordinary shares, the warrants being exercisable at a price of 130 pence, expiring 36 months from the date of drawdown of the 2006 Convertible, being 5 October 2009. These warrants will not be renewed and will expire on 5 October 2009.

The 2009 Convertible is also unsecured, and carries the interest and conversion terms as set out in the highlights above. The number of Petra shares to be issued, should the 2009 Convertible be converted by Al Rajhi, will be calculated by reference to the £/US$ exchange rate on the business day immediately prior to the date of conversion. The 2009 Convertible may only be converted in full. The 2009 Warrants may be exercised in part, with a minimum of 1 million shares to be exercised at each time.

~ Ends ~

For further information, please contact:

Cathy Roberts	Telephone: [phone]
Petra Diamonds, London	[e-mail]

Bobby Morse	Telephone: [phone]
Buchanan Communications	[e-mail]
James Duncan / Nicola Brower	Telephone: [phone]
Russell and Associates, Johannesburg	[e-mail] or [e-mail]

Adrian Hadden	Telephone: [phone]
Collins Stewart, London

Notes to Editors:

About Petra Diamonds

Petra Diamonds is a rapidly growing diamond mining group, focused on the African continent. A number of acquisitions have established Petra as one of the world's largest independent diamond groups by resources, with a total resource base of 265 million carats worth US$27.3 billion (as at September 2008 Resource Statement). The Company's objective is to continue to develop its stature as a leading diamond producer.

In South Africa, Petra Diamonds has interests in five producing mines - Cullinan, Koffiefontein, Helam, Sedibeng and Star - and has also agreed to acquire, from De Beers, the Kimberley Underground mines. In Tanzania, Petra has a 75% interest in the Williamson mine.  Petra has seen its production rise fivefold from 200,000 carats in the year to June 2008 to over 1 million carats in the year to June 2009. 

Petra Diamonds will only commit to working in countries which are members of the Kimberley Process and shareholders can remain assured that the Company's diamonds will only ever be 100% conflict free. Petra Diamonds is listed in London under the share code PDL. 

www.petradiamonds.com 

 

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