Petra Diamonds said creditors of its Finsch Diamond Mine approved a business rescue plan on 7 August to sell off the mine's assets, rather than resume operations.
Finsch entered business rescue in May, with an interim update following on 28 July.
The appointed practitioners concluded there was no viable way to restart mining at the site, turning instead to an asset disposal plan aimed at maximising recovery value for creditors. A secured creditor has provided post-commencement funding to keep site activities running, including the reclamation of assets ahead of sale.
Proceeds from any asset sales will be distributed according to claim rankings, with the secured creditor's claims, including its funding, ranked highest.
A skeleton workforce will handle the reclamation work for a defined period, and along with the rest of Finsch's employees, will be managed under Section 189 of South Africa's Labour Relations Act.
Employee claims arising from that process will be treated as claims against Finsch and paid out according to the same ranking structure.
Petra Diamonds said it will continue to update the market on material developments at the mine.
News Intelligence what this means for the company
Finsch creditors have voted to liquidate the mine's assets rather than restart production, after rescue practitioners found no viable path to resumption. This closes the door on any recovery scenario for Finsch and locks in a loss-mitigation exercise: a secured creditor is funding the asset reclamation, and proceeds will flow first to that creditor's claims before other stakeholders. Finsch entered business rescue in May, and this approval signals the operation will not return to diamond production.
Finsch's closure removes a material revenue source and locks Petra into a single-mine operation (Cullinan) at a time when the group faces weak diamond prices and a fully drawn ZAR 1.75 billion revolving credit facility. The asset sale will generate some recovery for creditors but does not restore production capacity or improve near-term cash generation.
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