PETRA Diamonds said it had secured R300m from a senior lender for working capital while it finalised business rescue for its currently suspended Finsch mine.
Commenting in the firm’s 2026 operating and business update, CEO Vivek Gadodia said Finsch’s business rescue practitioners had secured an extension to August for a business plan on which shareholders would vote.
Pressure was piled on Petra’s balance sheet during the year ended June. Net debt increased to $322m at year-end from $298m as of the third quarter. In an effort to ease some of the pain, the investor that provided working capital to Petra also agreed to defer a $6m payment in cash interest to January 2027 from this month.
Petra has been through a series of cost reduction and financial restructuring measures over the past five years as it has tried to cope with falling diamond prices for its production of smaller-sized diamonds while trying to complete a major capital expenditure programme at the Cullinan Mine.
Demand for smaller and less valuable diamonds – typically those used in cheaper diamond jewellery and engagement rings – has been hammered by the growth in lab-grown synthetic diamonds, which cost on average some 10% of the price of the natural diamond equivalent. Average pricing for Petra goods in the fourth quarter fell 21%.
Said Gadodia: “It is with great regret that Finsch was placed into business rescue. Despite its strong operating performance, its large proportion of smaller goods, compounded by the strength of the rand, made the mine untenable in these unprecedented market conditions.”
Petra’s other mine, the historic Cullinan operation near Pretoria, is subject to a restructuring. Gadodia didn’t provide details of possible retrenchments at the mine, but said on Tuesday it would finalise a new business plan by September.
Production guidance from Cullinan is suspended, but Petra is targeting output from the mine’s C-Cut, which normally yields large and so-called fancy coloured diamonds. “We anticipate this will provide some mitigation against the broader weaker market,” Gadodia said.
Petra fetched a relatively disappointing $77 per carat average price for Cullinan mine production in the fourth quarter, but higher value diamonds from C-Cut over 2026 have been “robust,” he said. This led to an average price for Cullinan for the whole year of $106/carat, up from $96/carat in Petra’s 2025 financial year.
This affirmed “… Cullinan Mine’s unique product mix can maintain margins notwithstanding the challenging current market conditions,” said Gadodia.
