Cullinan Mine Owner Pulls Itself Off the Market

SourcingOct 21, 2020

Cullinan Mine Owner Pulls Itself Off the Market

Petra Diamonds Ltd. has given up on finding a buyer and will enter into a debt-for-equity restructuring.

The Cullinan Mine in South Africa yielded these five blue diamonds weighing between 9.61 and 25.75 carats last month. Cullinan’s owner, Petra Diamonds Ltd., was up for sale but has since pulled itself off the market.

London—Petra Diamonds Ltd. is calling off the sale process and handing itself over to lenders in a debt-for-equity restructuring.

The diamond miner, which has operations in South Africa and Tanzania, put itself up for sale in June, weighed down by debt and hammered by market factors that the pandemic only exacerbated.

On Tuesday, Petra announced it was concluding the formal sale process as it had not generated any viable offers for the company or any of its assets.

Petra owns a total of four diamond mines: Cullinan, Finsch and Koffiefontein, all former De Beers Group mines in South Africa; and Williamson, a currently mothballed open-pit mine in Tanzania.

The restructuring will involve the London-listed miner’s $650 million bond debt being replaced by $337 million in new notes, $30 million of which will come from existing debtholders, while the remainder will be converted into equity.

Debtholders will then own 91 percent of the company, while existing stakeholders will see their share shrink to 9 percent.

The agreement also includes new governance arrangements and cashflow controls.

In a statement announcing the restructuring deal, Petra Chief Executive Richard Duffy said the agreement, which is subject to approval by all parties, will put the mining company on “viable footing” going forward.

“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,” he said.

“The board believes the agreement in principle announced today provides the business with a stable, deleveraged capital structure that will ensure the short- and long-term viability of the company. Today is an important milestone for Petra.”

The company is set to release is FY 2021 first-quarter results (for the three-month period ended Sept. 30) on Oct. 27.

Michelle Graffis the editor-in-chief at National Jeweler, directing the publication’s coverage both online and in print.

The Latest

Events & AwardsDec 03, 2021
JA New York's Spring Show to Return in 2022

The New Designer Gallery will also make its comeback.

Events & AwardsDec 03, 2021
Gary Roskin Will Receive the 2022 Bonanno Award

Roskin heads the International Colored Gemstone Association, and is a graduate gemologist, author, journalist, and diamond grading expert.

Policies & IssuesDec 03, 2021
Alliance for Responsible Mining Names New Executive Director

Gina D’Amato joins with more than 15 years of experience in sustainable development.

Brought to you by
Train Your Staff Today with Interactive eLearning

Join the prestigious brands, industry organizations and sellers using IGI’s educational services.

CollectionsDec 03, 2021
Piece of the Week: Angely Martinez’s Island Bar Ring

The designer’s memories of beach trips and nature in the Dominican Republic inspired her new opal and pearl collection, “Aqualescence.”

Weekly QuizDec 02, 2021
This Week's Quiz
Test your knowledge of jewelry news from the week of Nov. 29-Dec. 3, 2021.
Take the Quiz
FinancialsDec 02, 2021
Signet Raises Guidance Again, Expands Selection of Lab-Grown Diamonds

Its additions include an exclusive lab-grown diamond cut for Zales’ “Vera Wang True” line and a lab-grown option for Kay’s “Leo” cut.

TrendsDec 02, 2021
A New Book on Lover’s Eyes Jewelry Is Out Now

“Lover’s Eyes: Eye Miniatures from the Skier Collection” features more than 130 examples of the much-sought-after antique style.

Brought to you by
3 Tips For Entering the Estate Market

Generate foot traffic and expand your jewelry expertise by adding an estate assortment to your store in partnership with Windsor Jewelers, Inc.

SurveysDec 02, 2021
2021 Will Be the ‘Year of Jewelry,’ Analyst Says

Edahn Golan forecasts a blockbuster holiday season will cap off a stellar year for U.S. jewelry sales.