Throughout this calendar year
The Company updated the market on
To this end, the Company has engaged in an extended period of hitherto confidential discussions with the Group's relevant financial stakeholders and is pleased to announce that it has reached agreement in principle on a common set of commercial terms with respect to a long-term solution for the recapitalisation of the Group (the 'Restructuring') with each of the AHG and the South African lender group. The key features of the proposed Restructuring are as follows: partial reinstatement of the Notes debt and the contribution by holders of the existing Notes of
The parties will continue to work together towards agreeing a 'Lock-Up Agreement' to bind each party into supporting the Restructuring on these proposed terms, as further described in this announcement. This is expected to include members of the AHG and the South African lender group, subject to credit committee and other approvals. The Restructuring will involve the Group's black economic empowerment ('BEE') partners, and accordingly, the Company has also briefed the BEE partners on their involvement. The Company intends that its BEE partners will be parties to any binding agreements concerning the Restructuring, including any Lock-Up Agreement.
Having reached an agreement in principle on the terms of the Restructuring, the
The Company estimates the Group will have
Outline timetable
The Company expects to agree a Lock-Up Agreement with the AHG and the South African lender group in the early part of
A further update in relation to the Company's corporate calendar will be made in due course.
'We own and operate world-class diamond assets; all of our South African mines are now back at normal operating levels, despite being subject to stringent COVID-19 precautionary measures. The Williamson mine in
Commercial terms of the Restructuring
The following outlines the material features of the Restructuring that have been agreed in principle between the Company, the AHG and the South African lenders. The implementation of the Restructuring is now subject to agreeing documentation between the parties, including the Group's BEE partners, and PDL shareholder approval. Any full-form documentation involving the South African lenders will also be subject to obtaining approval from the respective lenders' credit committees before execution is possible.
Reinstatement of Notes debt and New Money
New Notes
All Noteholders shall have a right to subscribe for a portion of
A portion of the existing Notes debt will be reinstated alongside the New Money notes; each to be reinstated in the form of New Notes. The New Notes will be allocated as follows:
Material terms of the New Notes: It is contemplated that the above arrangements with respect to the Notes shall be effected through an English law scheme of arrangement under part 26 of the Companies Act 2006.
The remainder of the existing Notes debt will be exchanged for equity in PDL (the 'Debt for Equity'), pursuant to which new ordinary shares in PDL will be issued to the Noteholders in consideration for the assignment of existing Notes debt. The Debt for Equity will result in the Noteholder group holding 91% of the enlarged share capital of PDL in the following proportions:
As a consequence of the Debt for Equity, at least 9% of the enlarged PDL share capital will remain with the existing PDL shareholders (subject to dilution as a result of standard management equity incentive arrangements).
Implementation
The Debt for Equity as currently constituted is subject to the approval of existing shareholders of the Company at an EGM of the Company.
However, the Company is also preparing to implement the agreement in principle reached with its creditors through alternative structures should shareholder approval not be obtained at the relevant time. It is not anticipated that such alternative structures would result in any retention of equity or other interests in the Group by the existing shareholders of the Company.
3. Arrangements with the South African lender group
The various existing arrangements with the South African lender group, including the
Directors and Corporate Governance
It being acknowledged that the Company shall comply with the
Cashflow Control Enhancement Covenants
In addition to restrictions and tightening to existing covenants and baskets in relation to the Notes (which are to be agreed):
Cash Flow Protocols
All cash flows, whether from operations or otherwise, will be applied in accordance with a cash flow protocol. The protocol will include:
Notwithstanding the agreement in principle between the Company, the AHG and the South African lender group as indicated above, implementation of the Restructuring is still subject to finalisation of commercial, tax and legal due diligence, relevant conditions precedent and agreement of all customary implementation documentation (including with respect to all aspects of the above).
Outcome of Formal Sales Process
In connection with its strategic review of the Group's options with respect to its capital structure, the Company commenced a formal sales process on
Technical Review by SRK
At the request of the AHG (and coordinated by the AHG's advisers,
The report was based on publicly available information and validated the capital expenditures plan published by the Company in its press release dated
The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014. Upon the publication of this announcement via a
Contact:
Email: glen.cronin@rothschildandco.com
About
Petra Diamonds is a leading independent diamond mining group and a consistent supplier of gem quality rough diamonds to the international market. The Company has a diversified portfolio incorporating interests in three underground producing mines in
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. 250 million carats, which supports the potential for long-life operations.
Petra conducts all operations according to the highest ethical standards and will only operate in countries which are members of the Kimberley Process. The Company 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
Important Notice
This announcement contains statements about Petra that are or may be forward looking statements. All statements other than statements of historical facts included in this announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words 'targets', 'goals', 'should', 'would', 'could', 'continue', 'plans', 'believes', 'expects', 'aims', 'intends', 'will', 'may', 'anticipates', 'estimates', 'hopes', 'projects' or words or terms of similar substance or the negative thereof, are forward looking statements.
Such forward looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof. Petra disclaims any obligation to update any forward looking or other statements contained herein, except as required by applicable law or regulation.
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