PETRA Diamonds has launched a strategic review that could result in asset sales following “consultation with certain key stakeholders including its first and second lien creditors”.
The review brings Cullinan, near Pretoria in Gauteng, into play and comes amid crushing net debt which stood at $322m at the end of June, up from $298m three months earlier.
Petra’s other main asset – the Finsch mine near Lime Acres in the Northern Cape – is being closed after business rescue practitioners concluded there was no way to save the operation. But presumably, this would also be part of the review, a move that comes at the instigation of first and second-tier creditors who have claims over assets (lien).
The company said on Thursday in a stock exchange announcement the review would consider “all potential paths” to address its liquidity needs, including a possible sales process involving its assets. Petra said it was finalising the appointment of a financial adviser to assist with the review.
Petra said in its announcement there is “no certainty as to the outcome of the strategic review”.
Cullinan is Petra’s flagship operating mine and one of the world’s best-known diamond operations. It produced the 3,106-carat Cullinan Diamond in 1905, the largest gem-quality rough diamond ever found.
The stone was later cut into several diamonds, including the 530-carat Great Star of Africa, which forms part of the British Crown Jewels.
The strategic review is the latest step in Petra’s efforts to ease financial pressure after completing a major refinancing in 2025. In July, Petra secured an additional R300m working-capital facility from a senior lender and deferred about $6m in cash interest due that month until January 2027.
The financing arrangements required Petra to begin refinancing discussions during September, with the aim of agreeing non-binding commercial terms by the end of October.
Pressure on the company has been driven by prolonged weakness in the natural diamond market, particularly for smaller stones, as well as the stronger rand. Finsch, which has greater exposure to smaller diamonds, was placed into business rescue in May.
José Manuel Vargas has stepped down as chair and director, while Lerato Molebatsi has been appointed interim chair of the board.
Molebatsi, who joined Petra’s board as an independent non-executive director in 2023, was previously CEO of General Electric South Africa and held a senior communications role at Lonmin.
