Petra Diamonds warns over debt breaches
Shares fall despite reassurance the diamond producer has enough cash and loans to cover its liabilities
Disruptions of diamond production and sales in Tanzania and SA could cause London-listed Petra Diamonds to breach its two debt covenants at the end of 2017, but the company told investors it had enough cash and loans to cover its liabilities. Monday’s warning to shareholders of the possible breach of two of its three maintenance covenants pertaining measurements of consolidated net debt and finance charges to earnings before interest, tax, depreciation and amortisation when measured at the end of December, drove Petra’s shares down 4%. "We await the renegotiation of covenants and hope that the balance of risk is improving after December," Investec said, pointing out Petra was updating the market on its first quarter’s production on October 23, "which will provide an insight if all is on track to deliver targets". Petra’s warning followed it flagging possible difficulties with the two covenants in its year-end results to end-June as the company ramped up production at the Cullinan an...
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