Petra Diamonds PDL New Debt Facilities

  Petra Diamonds (PDL) - New Debt Facilities

RNS Number : 9404Q
Petra Diamonds Limited
13 November 2012




                                      





                       

13 November 2012 LSE: PDL

                                      

                                      

                            Petra Diamonds Limited

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

                                      

                  New Debt Facilities of ca. US$244 million



                                      

Petra Diamonds  Limited announces  that it  has entered  into agreements  with 
FirstRand Bank  Limited (acting  through its  Rand Merchant  Bank ("RMB")  and 
First National Bank ("FNB") divisions), Absa Corporate and Investment  Banking 
("Absa") (a division of Absa  Bank Limited and a  member of Barclays) and  the 
International Finance Corporation ("IFC") (a  member of the World Bank  Group) 
with regards  to  new  Group  debt facilities  of  ca.  US$244  million  ("the 
Agreements").





Highlights

· New debt  facilities of  ca. US$244  million represent  an increase  and 
reorganisation  of  Petra's  existing   debt  structures,  providing   greater 
assurance and flexibility with regards to the Group's project expansion plans



· Petra has entered into an  agreement with RMB/FNB and Absa for  ZAR1,600 
million of Rand debt facilities comprised of:

o  a  64   month  amortising   term  facility  ("ATF")   of  ZAR800   million 
(approximately US$92 million);

o  a  70  month   revolving  credit  facility   ("RCF")  of  ZAR300   million 
(approximately US$35 million); and

o a working capital facility  ("WCF") of ZAR500 million (approximately  US$57 
million)



· Petra has also entered into an  agreement with IFC for US$60 million  of 
US dollar debt facilities comprised of:

o a 64 month ATF of US$35 million; and

o a 70 month RCF of US$25 million





Johan Dippenaar, Petra's CEO, commented:

"We are pleased to have entered into these financing facility agreements  with 
RMB/FNB, Absa and IFC, which see the Group comfortably funded for the delivery
of its various major expansion programmes. This financing is an important  and 
independent validation by the lenders of the quality of Petra's asset base and
our strong management  team. These facilities  further strengthen our  balance 
sheet and  lend assurance  to the  Company's ability  to deliver  on its  core 
objective of rolling out its stated expansion plans and ramping up  production 
to 5 million carats per annum by 2019."



Background

As previously  announced,  Petra  has  undertaken  a  process  to  review  and 
restructure its  debt  facilities in  order  to  provide the  Group  with  the 
additional scope and  finance flexibility to  execute its capital  expenditure 
programme and  bring  the  Company's  stated  production  and  revenue  growth 
opportunities to account.



It is an opportune time to revisit the Group's previously agreed debt  levels, 
terms and structure, given  that the expansion  programmes have maximum  spend 
from FY 2013 to FY 2015 and given  that Finsch was not part of the Group  when 
the original debt  financing was  put in place  in 2010.  In addition,  Petra 
required an increase in its working capital and currency hedging facilities to
provide flexibility in line with expected revenue growth, owing to the Group's
larger diamond tenders (post the acquisition  of the Finsch mine in  September 
2011), the lead times to these tenders and the volatility experienced over the
last 12 months in both the ZAR/US$ exchange rates and rough diamond prices.



The combined facilities  will, together  with contributions  from Petra's  own 
treasury, finance the  expansions of the  Finsch and Cullinan  mines in  South 
Africa, expansions at Petra's other operations and the Group's general working
capital needs.



These new facilities replace all of the Group's current bank debt and  working 
capital facilities (provided by RMB/FNB and IFC) and increase the Group's debt
and working  capital facilities  (at an  assumed rate  of US$1:R8.70)  by  ca. 
US$108 million, from ca. US$136  million (ZAR662.5 million and US$60  million) 
to ca. US$244 million (ZAR1.6 billion and US$60 million).



Current total debt facilities of ca. US$136 million comprise ca. US$53 million
(ZAR462.5 million)  from RMB,  US$60  million from  IFC, and  working  capital 
facilities of ca. US$23 million (ZAR200million) from FNB. As at 30  September 
2012,  Petra  had  drawn  down  ca.  US$110.2  million  against  the   current 
facilities.





Details of the ATF

· The ATF is comprised of ZAR800 million and US$35 million

· The ATF will be available for Petra's draw-down up to December 2013

· The ATF is repayable by  way of five semi-annual payments commencing  in 
March 2016, with the last payment due in March 2018

· The ATF  interest rates  are JIBAR (ZAR  facility)/LIBOR (US$  facility) 
plus 4.0% margin



Details of the RCF

· The RCF is comprised of ZAR300 million and US$25 million

· The RCF will be available for Petra's draw-down up to August 2018

· The RCF is  repayable by September 2018;  Petra may make repayments  and 
then redraw against the RFC up to August 2018

· The RCF  interest rates  are JIBAR (ZAR  facility)/LIBOR (US$  facility) 
plus 5.5% margin



Details of the WCF

· The WCF  is comprised  of ZAR500  million, including  ZAR150 million  of 
hedging facilities  (as  required for  hedging  the US$  proceeds  of  Petra's 
tenders)

· The WCF is subject to annual renewal

· The WCF interest rate is South African prime less 0.5%





The  facilities  are  secured  on  Petra's  interests  in  Cullinan,   Finsch, 
Koffiefontein, Kimberley  Underground and  Williamson. No  warrants have  been 
issued in connection with the new debt facilities.



Each of  the  loan  facilities  under the  Agreements  is  interdependent  and 
completion of the Agreements, enabling Petra  to draw down on the  facilities, 
is conditional upon, inter alia, certain conditions precedent being  satisfied 
or appropriately  waived.  The  principal conditions  are  administrative  in 
nature, and include  consent required  from the South  African Reserve  Bank. 
Petra expects that all  of the conditions  precedent will be  met in the  near 
future. The Agreements contain standard  events of default and warranties  for 
facilities of this size and nature.





Note

Exchange rates of US$1:R8.70  as at 12  November 2012 and  US$1:8.30 as at  30 
September 2012 have been used for the purposes of this announcement.





                                   ~ Ends ~





For further information, please contact:



Petra Diamonds, London Telephone: +44 20 7318 0452
Cathy Malins           cathym@petradiamonds.com



Buchanan        Telephone: +44 20 7466 5000

(PR Adviser)
Bobby Morse     bobbym@buchanan.uk.com

Louise Mason    louisem@buchanan.uk.com

Cornelia Browne corneliab@buchanan.uk.com



RBC Capital Markets Telephone: +44 20 7653 4000

(Joint Broker)
Martin Eales        martin.eales@rbccm.com
Pierre Schreuder    pierre.schreuder@rbccm.com



Canaccord Genuity Limited Telephone: +44 20 7523 8000

(Joint Broker)
Rob Collins               rcollins@canaccordgenuity.com

Andrew Chubb              achubb@canaccordgenuity.com





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  eight producing  mines: seven  in South  Africa 
(Finsch, Cullinan, Koffiefontein, Kimberley  Underground, Helam, Sedibeng  and 
Star) and  one in  Tanzania  (Williamson). It  also maintains  an  exploration 
programme in Botswana.



The Company has recently commenced a disposal process in respect of the Helam,
Sedibeng and Star mines (the Fissure Mines),  which are no longer core to  the 
Group's portfolio.



Petra offers an exceptional growth profile, with a core objective to  steadily 
increase annual production to  5 million carats  by FY 2019.  The Group has  a 
major resource base in excess of 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 www.petradiamonds.com. 





About RMB

RMB, a  division of  the  FirstRand Bank  Limited,  is a  leading  diversified 
financial services  brand encompassing  investment banking,  fund  management, 
private wealth management  and advisory services.  The bank offers  innovative 
financing solutions to its clients in South Africa and across Africa. For more
information, visit www.rmb.co.za.





About Absa

Absa Corporate and Investment Banking, a  division of Absa Bank Limited and  a 
member of Barclays, is a leading  South African corporate and investment  bank 
with global reach,  offering clients financing,  risk management and  advisory 
solutions in a wide range of  currencies and structures across the globe.  For 
more information, visit www.absacapital.com.





About IFC

IFC, a  member of  the World  Bank Group,  is the  largest global  development 
institution focused exclusively  on the private  sector. IFC helps  developing 
countries achieve  sustainable  growth  by  financing  investment,  mobilizing 
capital in international financial markets, and providing advisory services to
businesses and governments. In FY12, IFC investments reached an all-time  high 
of more than  US$20 billion,  leveraging the power  of the  private sector  to 
create  jobs,  spark  innovation,  and   tackle  the  world's  most   pressing 
development challenges. For more information, visit www.ifc.org.







                     This information is provided by RNS
           The company news service from the London Stock Exchange

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