Petra Diamonds' wholly owned subsidiary, Finsch Diamond Mine (Pty) Limited (FDM), has entered into an agreement with IFC, a member of the World Bank Group, regarding a new revolving credit facility of US$25 million secured on the assets of FDM in respect of the Finsch diamond mine in South Africa and Petra's interest in FDM.
The new facility has been put in place in addition to a November 2011 Rand Merchant Bank (RMB) revolving credit facility, worth approximately US$36.9 million (ZAR300 million). On completion of the IFC agreement, the RMB facility will reduce to approximately US$24.6 million (ZAR200 million), so that the lenders together provide around US$49.6 million in revolving credit facilities to Petra.
These IFC and RMB revolving credit facilities are in addition to the debt facilities of approximately US$76.9 million that were put in place in November 2010 with IFC and RMB (broken down as U$40 million with IFC and approximately US$36.9 million (ZAR300 million) with RMB). Additionally, other than these revolving credit and debt facilities, Petra says it also has working capital (overdraft) facilities with RMB/FirstRand Bank Limited of approximately US$20.9 million (ZAR170 million).
Petra's total bank debt facilities now amount to approximately US$147.4 million. As at the date of this announcement, Petra has drawn down US$36.5 million of the IFC 2010 debt facility and approximately US$32.9 million (ZAR267.1 million) of the RMB 2010 debt facility. All other facilities remain undrawn, leaving approximately US$78 million available.
"Given the lead times between the Group's now larger diamond tenders (post the acquisition of the Finsch mine) and the volatility experienced over the last 12 months of both the Rand and diamond prices, these new revolving credit facilities provide Petra with additional scope and flexibility to execute its capital expenditure programme and bring the Company's stated production and revenue growth opportunities to account," says the miner in a statment.
"We are delighted to have entered into further credit facilities with IFC, whose continued support endorses the quality of our asset base, as well as our strong commitment to corporate social responsibility. These combined IFC and RMB facilities further strengthen Petra's financial position and the Company's ability to deliver on its core objective of rolling out its stated expansion plans and ramping up production to over 5 million carats per annum by 2019," says Petra Chief Executive Officer Johan Dippenaar.