PETRA Diamonds has sold its 425-carat ‘Legacy of the Cullinan Diamond Mine’ diamond to Stargems Group in partnership with Choron Group for $15m.
“This is a significant sale for Petra Diamonds and an endorsement of the quality not only of the Legacy diamond, but also the Cullinan ore body itself, which is known for its exceptional stones,” said Richard Duffy, CEO of Petra Diamonds in a statement.
Petra has been struggling to clear its multi-million-dollar debts after it borrowed heavily to revamp the Cullinan facility and began mining a new section of ore last July. However, Cullinan has been profitable every year since Petra acquired it in 2008 and the mine is expected to generate free cash flow this year.
Petra announced in April its lenders had agreed to adjust covenant terms for debt provided to the company – a development that was largely anticipated but which Duffy described as support for the diamond firm’s ambition to become cash flow.
“The agreement of our lender group to amend the financial covenant levels relating to our banking facilities demonstrates their continued support of Petra’s business and strategy, to deliver consistent production from our diversified portfolio of assets in order to drive free cash flow generation and reduce our net debt,” he said.
The lender group consists of Absa Bank, FirstBank Group via Rand Merchant Bank, Investec Asset Management and Nedbank Corporate and Investment Banking.