Jun 29, 2020

Petra Initiates Sale Process of Its Business in Part or Whole

The Board of Petra Diamonds Limited recently announced its decision to seek offers for the Company, in part or in whole.

“Since commencing the strategic review in relation to its capital structure options as announced on 27 March 2020, the Company has focused on exploring all options available to it in relation to its $650 million outstanding 7.25% senior secured notes which are due for repayment on 1 May 2022,” the Company said when making the announcement. “Pursuant to this strategic review and in order to assess all strategic options to maximise value to its stakeholders, the Board of Petra Diamonds Limited announces today that it has decided to seek offers for the Company, or for parts of the business or assets of the Petra Diamonds group (the Group).”

Petra clarified that it is not in receipt of any offer for the Company or any parts of the Group’s business or assets at the time the announcement was made.

Petra invited those interested in putting forward a proposal to contact the Company’s advisers, Rothschild & Co.

“It is currently expected that any party interested in participating in the formal sale process will receive certain publicly available information on Petra as part of Phase One, following which interested parties shall be invited to submit their proposals to Rothschild & Co.,” Petra explained. “Upon receipt of any proposals, the Company and its advisers will determine (at their sole discretion) whether to progress any interested parties into a formal Phase Two sale process.  A formal sale process will require interested parties to enter into a confidentiality agreement with the Company on terms satisfactory to the Board of Petra and on the same terms, in all material respects, as other interested parties. Further announcements regarding the timing for any formal Phase Two sale process will be made when appropriate.”

As there was no certainty that an offer would be made or that a deal would be concluded, the Board of Petra reserved the right “to alter or terminate this process at any time and in such an event, the Company will make an announcement as appropriate”. The Board of Petra also stated emphatically that it reserves the right to reject any approach or terminate discussions with any interested party at any time.

Further, the Company noted that as the UK City Code on Takeovers and Mergers (the Takeover Code) does not apply to Petra, any formal sale process would not be subject to the jurisdiction of, or regulated by, the UK Panel on Takeovers and Mergers.

“Petra has however incorporated certain takeover related provisions into the Company's Bye-laws and the Board of Petra would seek to apply the principles of the Takeover Code in relation to any offer for the Company,” the Company stated.

The Company assured stakeholders that it will continue to update all on this process; and other aspects of the strategic review as and when appropriate.