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Petra Diamonds Turns to Shareholders to Raise Capital
The struggling diamond mining company, which owns the historic Cullinan mine, has launched a rights issue to raise about $25 million.
The new plant and final recovery buildings at the Cullinan Diamond Mine in South Africa, owned by Petra Diamonds. The company, which recently sold off two of its four diamond mines, is struggling and has launched a rights issue it hopes will raise about $25 million. (Photo courtesy of Petra Diamonds Ltd.)
London—Petra Diamonds Ltd. has launched a rights issue that aims to raise £18.8 million (about $25.1 million) in capital to help the London-based diamond miner stay afloat.
A rights issue is a financing mechanism that gives a company’s existing shareholders the opportunity to buy more shares, usually at a discounted price.
Petra said it is issuing more than 114 million new ordinary shares at a price of 16.5 pence per share. The company’s current shares were trading at 19.80 pence as of press time.
It said the rights issue was fully underwritten and committed by a select group of shareholders under a backstop agreement.
It is the final phase in the company’s refinancing plan announced in August.
The plan includes pushing the maturity date for Petra’s senior secured bank debt from January 2026 to December 2029 and extending the maturity date of its senior secured second lien notes from March 2026 to March 2030.
Both the refinancing and the rights issue are subject to shareholder approval. A special general meeting during which shareholders will vote on both is scheduled for Nov. 6.
“Petra has undergone immense change over the past 18 months in order to become a streamlined business that is now positioned to deliver sustained value for its stakeholders,” said Vivek Gadodia, the company’s interim joint CEO.
“This has enabled us to refinance our debt with a fit-for-purpose solution that allows capital execution while providing the headroom and flexibility to weather the current market conditions. I would like to once again thank our shareholders, noteholders, and our senior lender for coming together in support of the company.”
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A rights issue is a financing mechanism that gives a company’s existing shareholders the opportunity to buy more shares, usually at a discounted price.
Petra said it is issuing more than 114 million new ordinary shares at a price of 16.5 pence per share. The company’s current shares were trading at 19.80 pence as of press time.
It said the rights issue was fully underwritten and committed by a select group of shareholders under a backstop agreement.
It is the final phase in the company’s refinancing plan announced in August.
The plan includes pushing the maturity date for Petra’s senior secured bank debt from January 2026 to December 2029 and extending the maturity date of its senior secured second lien notes from March 2026 to March 2030.
Both the refinancing and the rights issue are subject to shareholder approval. A special general meeting during which shareholders will vote on both is scheduled for Nov. 6.
“Petra has undergone immense change over the past 18 months in order to become a streamlined business that is now positioned to deliver sustained value for its stakeholders,” said Vivek Gadodia, the company’s interim joint CEO.
“This has enabled us to refinance our debt with a fit-for-purpose solution that allows capital execution while providing the headroom and flexibility to weather the current market conditions. I would like to once again thank our shareholders, noteholders, and our senior lender for coming together in support of the company.”
Petra announced the launch of the rights issue in conjunction with the release of its annual report for fiscal year 2025, ended June 30.
The results exclude the Williamson and Koffiefontein mines.
Petra sold Koffiefontein in October 2024, and it finalized its sale of Williamson in May; it still operates the Cullinan and Finsch mines.
In FY 2025, Petra’s revenue fell 33 percent to $207 million (FY 2024: $310 million).
The average realized price for the company’s rough diamonds was $87 per carat, down 19 percent from $108 per carat in fiscal year 2024, a decline largely due to a 17 percent drop in like-for-like diamond prices.
Loss before taxation increased 68 percent, from $114 million in FY 2024 to $191 million in FY 2025, due to lower sales, unfavorable product mix, and an overall weaker market for rough diamonds.
Gadodia and his co-interim CEO Juan Kemp said, “FY 2025 was a year of inward focus and change for Petra, against another challenging year for the industry.
“We achieved some significant milestones for the business, including the sale of Koffiefontein and Williamson, and are on track to deliver the refinancing that will secure our future. We end the year as a lower cost, streamlined business with world-class assets, and a clear path forward.”
Gadodia and Kemp said since the company’s fiscal year ended in June, it has cut down operational hours at Cullinan, which has moved from a 24/7 operation to a three-shift operation.
At Finsch, it is looking to raise enough money to open up parts of a new ore body.
They also said that the diamond market has remained “volatile” since the end of June, noting that the 50 percent tariff the United States has placed on Indian imports is the biggest factor affecting the rough diamond market right now.
Gadodia and Kemp have been serving as Petra’s interim joint CEOs since January, when CEO Richard Duffy resigned.
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