Petra Diamonds sells a stake in Kimberley JV for $ 22 million

(Reuters) – Petra Diamonds sold its stake in the joint venture Kimberley Ekapa Mining for about 300 million South African rand ($ 22 million), the minister said on Thursday.

The shares listed on the London Stock Exchange, which have fallen by more than half in the last two years, have risen 2.8% to 55p at 1135 GMT.

Petra Diamonds ( PDL.L ) stated that she would sell her 75.9% stake in the company, which focuses on mining in the South African city of Kimberley, to its joint venture partner Ekapa Mining.

The sale would allow Petra to focus on its Finsch and Cullinan diamond mines, reduce operational risk for the group and consolidate its finances.

The company, which operates five mines in Tanzania and South Africa, has stated that it expects the sale of its holdings to be accounted for as a non-cash impairment charge in the order of 35 percent. to $ 45 million.

About 600 workers lost tools last September during a protest against the compensation of the Kimberley Ekapa Mining joint venture and the Finsch mine.

The workers' strike contributed to Petra's tense financial situation, forcing him to renegotiate his loan agreements as the debt escalated.

Petra was also affected by production delays, a cargo of confiscated diamonds in Tanzania and a strong South African rand, and requested waivers from its lenders on three occasions.

The miner raised $ 178 million in a rights issue in June to help reduce his growing debt.

"With the strategic priority of ensuring that all of Petra's portfolio assets generate returns and contribute to positive cash flows, we view the divestment as a positive development," RBC analysts said in a statement. a note. on the minor.

The transaction is expected to be completed in the first quarter of fiscal year 2019 of Petra and is subject to the approval of regulatory authorities and lenders.