Saddled with hundreds of millions of dollars in debt and facing a diamond market hobbled by COVID-19, miner Petra Diamonds has put itself up for sale.
The London-based company announced after market close Friday June 26 it is seeking a buyer for some or all its diamond mines.
Based in London, Petra Diamonds has a total of four operations: the Cullinan, Finsch and Koffiefontein mines in South Africa, and the open-pit Williamson, Tanzania’s only major diamond mine.
All four are former De Beers Group properties.
In operation since the early 1900s, Cullinan is known as a source of large Type IIa stones as well as blue diamonds and holds the distinction of producing the largest rough diamond ever recovered, the 3,106-carat Cullinan. (The mine, originally called Premier, was later renamed Cullinan in homage to the famous diamond.)
Petra, which has $650 million in outstanding 7.25 percent senior secured notes due for repayment in May 2022, began a strategic review in late March.
The company had problems prior to the spread of coronavirus, including weak diamond prices, troubles with its Williamson mine in Tanzania, and the debt incurred building a new processing plant at Cullinan and taking the Finsch mine underground.
The pandemic exacerbated its issues, dampening demand and causing prices to drop at its March sale.