Petra Diamonds (LSE:PDL) announced it has secured a binding advance payment agreement worth at least $20 million from a mid-stream diamantaire group, giving the London-listed diamond miner emergency liquidity as it pushes through a strategic review launched to address its stretched balance sheet.
The facility, agreed through subsidiary Cullinan Diamond Mine Proprietary, provides revolving advances against future run-of-mine production from the Cullinan underground mine in South Africa. As a condition of the deal, Petra's senior secured lender has agreed a forbearance letter that holds off enforcement action on specified defaults for 12 months from the letter's date, or until the advance payment amounts are repaid in full, whichever comes first.
Consolidated net debt rose to $348 million at 30 September, up from $322 million at 30 June, while unrestricted cash on hand fell to $7 million from $9 million over the same period.
The group's $107 million revolving credit facility and a R300 million ($18 million) additional facility from Absa Bank, secured in July 2026, were both fully drawn as at 30 September.
"The first quarter of the year has been a truly challenging time for the company, with the market remaining weak, the S189A process at Cullinan Mine and the rest of Group, and the implementation of the Business Rescue process at Finsch, all of which have been managed against a very tight balance sheet," said chief executive Vivek Gadodia.
Petra operates the Cullinan and Finsch underground diamond mines in South Africa, recovering and selling rough diamonds, including high-value Type II stones, through tenders and direct sales.
Total revenue for the first quarter of the 2027 financial year fell to $21 million, down from $30 million in the fourth quarter of the 2026 financial year, on 329,948 carats sold against 396,398 carats previously. Average realised prices dropped to $63 per carat from $76 per carat, a decline management attributed to a weaker product mix and lower occurrence of Type II diamonds.
Underground ore processed at Cullinan fell 3% quarter on quarter, which Gadodia described as resilient given productivity was hit by the Section 189A labour restructuring process, maintenance-related downtime and broader uncertainty around the company and the sector.
Overall production fell 5% quarter-on-quarter as tailings processed dropped 14%, after higher volume was processed in the prior quarter.
The Section 189A process at Cullinan and across the group concluded in October after three to four months of engagement, resulting in 25 redundancies and cost reductions expected to deliver approximately $3 million in annualised sustainable savings.
Management expects product mix and grade to improve from November, once critical mining equipment that began arriving at Cullinan in October is fully delivered, and the C-Cut crushers are back in operation.
Read more about Petra Diamonds
- 07/08/26Petra Diamonds creditors approve Finsch asset sale plan
- 10/06/26Petra Diamonds suspends Finsch mine production as business rescue gets under way
- 29/05/26Petra Diamonds starts business rescue at Finsch
Separately, Finsch's business rescue practitioners are progressing asset disposals under the plan approved by creditors on 7 August, with more than 3,000 lots catalogued for auction and underground asset recovery nearly complete; a retrenchment agreement signed on 14 October resulted in the retrenchment of all Finsch employees, with a skeleton crew remaining to help complete the plan.
The company also disclosed that a UK court made a winding-up order against subsidiary Petra Diamonds UK Treasury on 14 October, concerning owed corporation tax for the 2025 financial year.
Petra's shares and its second lien notes remain suspended from trading after the company was unable to publish audited results for the year ended 30 June by the 31 October deadline, with Euronext Dublin confirming the notes' suspension on 2 November; Petra intends to seek restoration of both listings once the audited results are published.
The strategic review, launched on 1 October, is running three workstreams in parallel: short-term liquidity support, a consensual refinancing and a potential sale of the company's assets, with the board stating there is no certainty as to its outcome.