(Bloomberg) -- Petra Diamonds Ltd. plans to raise $178 million from shareholders as the southern African gem miner seeks to cut a debt load that has seen it breach its banking terms.
Petra will sell shares at 40 pence each, which compares with Wednesday’s closing prices of 76 pence, and RBC Capital Markets, Barclays Plc and BMO Capital Markets are running the sale, the company said in a statement Thursday. The stock slumped as much as 18 percent, the most since January.
It’s been a difficult 18 months for Petra as the company redeveloped its flagship Cullinan mine, where the world’s biggest-ever diamond was found in 1905. It has battled with weak prices and a surging South African rand, while there have also been concerns from investors about the debt pile that the company has built up.
Petra has more than $600 million of debt it accumulated by building a new plant and digging deeper at Cullinan. Its lenders have waived covenants for December 2017 and relaxed them for upcoming June and December measurements, with the company now able to post a higher net debt-to-earnings ratio.
Petra has three other mines in South Africa and one in Tanzania.
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