Petra Diamonds warns on bank loan breach after Tanzania and South Africa troubles

Alys Key
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Diamonds have been seized from a Petra site by Tanzanian authorities

Shares in Petra Diamonds closed down over five per cent yesterday after the firm warned it was likely to breach conditions on its banking agreements.

The London-listed company said strikes at three of its South Africa sites and greater regulation in Tanzania had hit its earnings and it was subsequently unlikely to reach an underlying earnings ratio.

Petra said it had made its lender aware of the possible breach.

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Shares fell as much as six per cent yesterday, closing down 5.4 per cent at 79p.

But analysts at Liberum said “we would be surprised to see anything punitive arise from the negotiations given how close Petra Diamonds is to a sharp deleveraging as its two key assets ramp up, and credit fears will likely dissolve”.

The Tanzanian government seized diamonds from a Petra-owned mine last month, saying that the company had not declared the full value of its yields. Petra denies these claims.

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