ADONIS Pouroulis today stepped down from the board of Petra Diamonds, a company he founded and led for 23 years. He is succeeded by industry veteran, Peter Hill, who was appointed a non-executive director of Petra and chairman-designate in December.
Pouroulis tenure at Petra appeared limited after 22% of voting shareholders opposed his re-election at the firm’s annual general meeting in 2019. Petra stood behind its chairman at the time, but said it had embarked on a broad-ranging succession strategy at board level.
Hill, a seasoned mining executive, started his career at Anglo American and worked at Rio Tinto. He is currently non-executive chairman of the UK’s Keller Group, and of the leading European and Australasian building products company, Volution Group.
Pouroulis founded Petra Diamonds in 1997. It began shakily but found its feet after being named the winning bidder for De Beers’ Koffiefontein mine in 2006. It subsequently bought the famed Cullinan mine from De Beers a year later. Petra then embarked on an ambitious expansion programme aiming at production of five million carats a year under the management of CEO, Johan Dippenaar. It appears to have over-stretched, however: the company guided to full-year production of 3.8 million carats for this year.
In addition to the change in chairmanship, Varda Shine – a former De Beers executive – and a non-executive director of Petra will assume the chairwomanship of the remuneration committee, succeeding Gordon Hamilton.
The shake-up of senior management comes as Petra faces existential questions about its ability to continue operating under increasing liquidity constraints.
It said last week it had $170m in cash, diamond debtors and access to debt but loan notes totalling $650m fall due in 2022. Its efforts to eat into net debt have not been successful as it encountered operational delays and hiccoughs, and concurrently ran into a poor market for diamonds, recently exacerbated by the COVID-19 pandemic which has driven consumers off the high street.
As of December 31, interim net debt climbed year-on-year to $596.4m from $559.3m. This was despite generating positive cash flow and making savings in terms of a business improvement programme.
Petra said it had retained the services of Rothschild & Co to assess options open to it. Although not stated by the company this could involve a proposed rollover of the loan note programme or even the disposal of assets in order to repay debt.
