Petra Diamonds petitions investors for funds

The mining company intends to raise R2 billion from investors to cut debt and buffer working capital.

Mining firm Petra Diamonds said this week that it will raise $178 million (R2 billion) from investors. The miner says it will use up to $120 million to pay down debt and the balance to buffer its working capital from the strength in the rand. According to Reuters, new shares will be offered at 40 pence apiece.

The company said in a statement:

“The net proceeds from the rights issue will be used to accelerate a reduction in leverage to a more sustainable level, strengthen the balance sheet and increase the financial flexibility of the group.”

Petra Diamonds’ portfolio incorporates five producing operations – four in South Africa and one in Tanzania – as well as exploration in Botswana and South Africa.

Pictured: Johan Dippenaar, Petra Diamonds CEO