Diamond miner Petra Diamonds has concluded a binding, credit-approved term sheet for the refinancing of its first lien debt facility with its South African lender group, providing for more favourable terms than the group’s current first lien facilities.
The conclusion of the new facility is subject to the completion of appropriate definitive agreements, which are expected to be finalised during the third quarter of its 2022 financial year.
This refinancing reflects an improved group balance sheet and financial profile, supported by a quicker-than-expected diamond price recovery and the continued recovery of exceptional diamonds, the company notes.
“The significant improvement in our facility reflects our stronger cash flow generation and improved balance sheet resulting from a robust diamond market and solid operational performance,” comments CE Richard Duffy.
A new revolving credit facility (RCF) with Absa Bank, acting through its corporate and investment banking divisions, will replace the existing RCF and term lending arrangements with the current South African lender syndicate comprising Absa, Nedbank, RMB and Ninety One.
The new terms include, besides others, an improved structure, with a single R1-billion RCF replacing the existing amortising term loan and the R408.8-million RCF.
During January, Petra settled the R402.2-million drawn under the existing RCF from available cash balances.
The terms also include a more appropriate covenant package resulting in improved headroom and flexibility on the balance sheet; an extended tenure for the RCF with a maturity date of December 2025; a more usual bullet payment at maturity; and reduced financing costs, with improved margin and commitment fees.