Petra Diamonds raises £73m

3rd Dec 2009 08:16

Petra Diamonds, which part owns South Africa's Cullinan mine, has raised US$120m (£72.7m) from a placing of shares at 60p each to strengthen the balance sheet and develop its mines.It will use the money to pay off $24.6m of the $80m Al Rajhi Holdings loan as part of the option to increase Petra's holding in the Cullinan mine from 37% to 74%.The rest of the cash will provide working capital to boost diamond production from its six producing mines in South Africa and Tanzania, and repay the $20m Al Rajhi convertible loan note.Petra will throw $15m (£9.1m) at the Cullinan mine and the same amount on expansion at the Williamson mine, while $38.9m (£23.6m) is for working capital and repayment of short term debt.Boss Johan Dippenaar said the company had received "overwhelming support" from existing shareholders and over 40 new long-only institutional investors, which should improve liquidity.Last week, Petra sold the 168 carat special white diamond recently recovered at the Cullinan mine for US$6.28m at approximately US$37,380 per carat