JOHANNESBURG (miningweekly.com) – Petra Diamonds’ black economic-empowerment (BEE) partners have secured refinancing from Absa Corporate and Investment Banking and FirstRand Bank, through Rand Merchant Bank (RMB), to settle the R1.08-billion in loans due to Petra following Senakha Mining Investments, Thembinkosi Mining Investments and the Petra Diamonds Employee Trust’s acquisition of interests in the Finsch and Cullinan mines.
The move will allow Petra to strengthen its balance sheet and confirm the start of dividends distribution for the current financial year to June 2015.
“The refinancing of the BEE partner loans is a validation by Absa and RMB of the quality of Petra’s asset base, cash flows and management team. The repayment of these loans significantly strengthens the company’s balance sheet, enhances flexibility and places Petra in a strong position financially,” explained Petra CEO Johan Dippenaar.
The diamond miner had agreed to finance the partners’ 26% share in each mine when the parties acquired the Finsch and Cullinan mines from De Beers.
The loans, which would now be paid to Petra four years early, were subject to normal commercial interest rates and were due to be repaid out of the Finsch and Cullinan mine free cash flows.
The BEE partners would repay Absa and RMB from their share of cash flows from Finsch and Cullinan, with the loan repayment schedules prudently structured to allow for flexibility around on-mine cash flows and loan repayments.
The deal would also see employees of Petra’s South African operations, who were the beneficiaries of the Petra Diamonds Employee Trust, receive their first trust distribution in December, up to four years earlier than previously expected.