LONDON: Petra Diamonds Limited (LSE: PDL) has entered into an agreement to sell its entire shareholding in the entity that holds its interest in Williamson Diamonds Limited (WDL) to Pink Diamonds Investments Limited for up to $16 million.
Transaction Highlights:
– The sale includes Petra’s entire shareholding in the entity holding its WDL interest and all shareholder loans owed by WDL to Petra.
– The $16 million consideration will be payable by Pink Diamonds out of WDL’s distributable cash, with 20% of any distributable cash generated annually payable to Petra until fully paid. However, there is no certainty that the full consideration will be paid.
– Completion of the transaction is subject to regulatory and lender approvals, including from the Tanzanian Mining Commission and the Tanzanian Fair Competition Commission. It is expected to occur in the first quarter of 2025.
– Petra intends to use any net proceeds from the transaction for general corporate purposes.
Petra’s CEO, Richard Duffy, stated that the transaction would consolidate WDL’s ownership under Pink Diamonds, which is affiliated with Taifa, the long-term technical services contractor at the Williamson Mine. He expressed confidence in Pink Diamonds’ ability to operate the mine responsibly.
Rostam Azizi, Chairman of Pink Diamonds, highlighted Taifa’s extensive mining experience in Tanzania and expressed pride in transitioning the Williamson Mine to exclusively Tanzanian ownership.
The transaction is part of Petra’s strategic review, addressing WDL’s short-term liquidity challenges and capital investment needs. Petra concluded that consolidated ownership is in the best interest of all stakeholders.