REG-Petra Diamonds Ltd: Launch of 10 for 17 fully underwritten Rights Issue and update on Refinancing
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NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.
THE FOLLOWING ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS OR
PROSPECTUS EQUIVALENT DOCUMENT AND INVESTORS SHOULD NOT MAKE ANY INVESTMENT
DECISION IN RELATION TO THE ORDINARY SHARES EXCEPT ON THE BASIS OF THE
INFORMATION IN THE PROSPECTUS WHICH IS PROPOSED TO BE PUBLISHED IN DUE COURSE.
17 October 2025 LSE: PDL
Petra Diamonds Limited
("Petra", "the Company" or "the Group")
Launch of 10 for 17 fully underwritten Rights Issue and update on Refinancing
Introduction
On 8 August 2025, the Company announced it had reached agreement in principle
with its financial stakeholders for a long-term solution for the refinancing
of the Group (the " Refinancing Announcement
"). This was the outcome of extensive engagement with the Company's
financial stakeholders to refinance the Group's senior secured bank debt
facilities and 9.75% senior secured second lien notes (the “
Refinancing ”) following a strategic internal
restructuring programme to simplify and streamline the business and operating
model. Further updates on the status of the Refinancing were announced by
Petra on 29 August 2025, 11 September 2025, 25 September 2025 and 30 September
2025.
The Refinancing comprises:
* an extension to the maturity date of the Senior
Secured Bank Debt from January 2026 to December 2029, alongside certain other
changes to the terms of the Senior Secured Bank Debt;
* an extension to the maturity date of the Notes from
March 2026 to March 2030 alongside concurrent amendments to the Notes,
including the introduction of a "payment in cash or equity" mechanism which
allows the Notes Issuer to make interest payments on the Notes in equity of
the Company rather than cash, at the Notes Issuer's discretion, and an
increase in the cash interest rate to 10.5% (or 11.5% if the Note Issuer uses
equity to make interest payments); and
* a rights issue of approximately £18.8 million
(equivalent to approximately US$25.1 million), fully underwritten and
committed by certain existing Shareholders (the "
Rights Issue ").
The Board of Petra is pleased to announce today the launch of the Rights Issue
of 114,236,344 new Ordinary Shares at 16.5 pence per new Ordinary Share. The
Rights Issue is fully underwritten and committed by the Backstop Shareholders
(being The Terris Fund Ltd., SAC, Azvalor Asset Management SGIIC SA, JOSIVAR
Sarl, José Manuel Vargas (in his personal capacity), Kyma Capital Limited,
Mecamur S.L., The Langman 2010 Descendants Trust, Vivek Gadodia and Jozephus
Kemp) who have agreed, pursuant to the terms of the Backstop Agreement to
underwrite the Rights Issue.
In addition, the Company is also pleased to announce the launch of the Consent
Solicitation process to implement the Notes Refinancing, with the Notes Issuer
requesting (i) approval of the terms of an amended and restated indenture, on
the basis of conditions set forth in a third supplemental indenture; (ii) that
the Notes Trustee execute the Implementation Deed setting out the steps
required to complete the Refinancing; (iii) that the Notes Trustee execute an
amendment and restatement agreement to the Intercreditor Agreement; and (iv)
that the Notes Trustee execute the Deed of Release.
As a result of the agreement by Noteholders representing over 99% of the
outstanding principal amount of the Notes to support the Consent Solicitation
under the Lock-Up Agreement, the Company expects that the requisite consents
to effect the amendments to the Notes will be received promptly after the
launch of the Consent Solicitation, shortly following which the Notes Trustee
will be directed to execute the Implementation Deed.
The Implementation Deed sets out (among other things) the steps required to be
taken to complete the Refinancing (including the amendment of the Notes and
the extension of the maturity date in respect of the Senior Secured Bank
Debt). As at the date of this announcement, the Implementation Deed has been
substantially agreed by all of the relevant parties to it and the
Implementation Deed is expected to be executed after the requisite consents
have been provided under the Consent Solicitation (and before the Special
General Meeting).
Vivek Gadodia, Interim Joint Chief Executive Officer, commented:
" Today marks the final leg of Petra’s Refinancing with
the launch of the Rights Issue and the Consent Solicitation process to amend
and extend the Notes.
Petra has undergone immense change over the past 18 months in order to become
a streamlined business that is now positioned to deliver sustained value for
its stakeholders. This has enabled us to refinance our debt with a
fit-for-purpose solution that allows capital execution while providing the
headroom and flexibility to weather the current market conditions.
I would like to once again thank our shareholders, noteholders and our senior
lender for coming together in support of the Company. This substantially
strengthens our capital structure and allows us to focus on delivering on our
business plan. "
Details of the Rights Issue
The Company intends to raise approximately US$25.1 million (approximately
£18.8 million) (approximately US$22.4 million net of expenses) by way of a
Rights Issue.
The Rights Issue is being made at an issue price of 16.5 pence per Rights
Issue Share (the " Issue Price "),
which is payable in full on acceptance by no later than 11:00 a.m. (London
time) on 21 November 2025.
The Rights Issue is fully underwritten and committed by the Backstop
Shareholders who have agreed, pursuant to the terms of the Backstop Agreement,
to underwrite the Rights Issue at a price of 16.5 pence per Rights Issue
Share.
The Rights Issue is conditional, inter alia
, upon:
(i) the passing of the Refinancing Resolutions
(without amendment) at the Special General Meeting;
(ii) the Backstop Agreement having become
unconditional in all respects (save for the condition relating to Admission of
the Rights Issue Shares and Backstop Fee Shares) and not having been
terminated in accordance with its terms prior to Admission of the Rights Issue
Shares and Backstop Fee Shares; and
(iii) Admission of the Rights Issue Shares becoming
effective by not later than 8:00 a.m. on 7 November 2025 (or such later time
and/or date as the Company and the Backstop Shareholders may agree, being no
later than 21 November 2025).
Both the Rights Issue and the Refinancing are conditional on the passing of
the Refinancing Resolutions at the Special General Meeting, however while the
Refinancing is conditional on completion of the Rights Issue, the Rights Issue
is not conditional on completion of the Refinancing.
Action to be taken in respect of the Rights Issue
On the basis that dealings commence on 7 November 2025, the latest time for
acceptance by Shareholders under the Rights Issue will be 11.00 a.m. on 21
November 2025. The procedure for acceptance and payment will be set out in
Part XII ( Terms and Conditions of the Rights Issue
) of the Prospectus. Further details will also appear in the
Provisional Allotment Letter, which will be sent to all Qualifying Non-CREST
Shareholders. If Shareholders are in any doubt as to what action they should
take, they should immediately seek their own financial advice from their
stockbroker, bank manager, solicitor or other independent professional adviser
who, if they are taking advice in the UK, is duly authorised under FSMA, or
from any appropriately authorised independent financial adviser if they are in
a territory outside the UK, in each case who specialises in advice on the
acquisition of shares and other securities.
Notice of Special General Meeting
The issue of the new Ordinary Shares in connection with the Rights Issue, the
Backstop and the PICE Mechanism, the approval of the Incentivisation Plan and
the grant of the Warrants in connection with the Incentivisation Plan and the
Refinancing, will all require shareholder approval.
Accordingly, the Company has convened a Special General Meeting for 8:30 a.m.
(London time) on 6 November 2025 at the offices of Herbert Smith Freehills
Kramer LLP, Exchange House, Primrose Street, London EC2A 2EG, United Kingdom.
The Special General Meeting is being held for the purpose of considering and,
if thought fit, passing the Resolutions. The Resolutions will be proposed as
either ordinary or special resolutions, and will be passed if approved by the
requisite majority of votes cast, either in person or by proxy.
In the event that the Resolutions are not passed, the Rights Issue and the
Refinancing will not take place and the Company will not receive the net
proceeds from the Rights Issue of approximately US$22.4 million (approximately
£16.8 million). In such circumstances, the Company is of the opinion that, as
at the date of the Prospectus, the Group does not have sufficient working
capital for its present requirements, that is for at least the next 12 months
from the date of the Prospectus. It is therefore very important that
Shareholders vote in favour of the Resolutions to be proposed at the Special
General Meeting so that the Rights Issue can be completed and the potential
adverse consequences described in more detail below can be avoided.
Irrevocable undertakings
The Company has received irrevocable undertakings to vote (or to procure the
vote) in favour of the Transactions at the Special General Meeting from
certain Shareholders (including the Backstop Shareholders and each of the
Directors who hold Ordinary Shares) who hold, in aggregate, approximately
74.2% of the Company's total voting rights.
Recommendation
The Board considers that the Transactions are in the best interests of the
Company and its Shareholders as a whole. Accordingly, the Board recommends
that Shareholders vote in favour of the Resolutions to be proposed at the
Special General Meeting, as the Directors each intend to do so in respect of
their own legal and beneficial holdings, amounting to 22,471,525 Existing
Shares (representing approximately 11.6% of the Company's existing issued
ordinary share capital as at the Latest Practicable Date).
The Chairman has a personal interest in the Resolutions (both directly and
through JOSIVAR Sarl, an entity that is wholly-owned by the Chairman) as a
Backstop Shareholder, a Noteholder and as a potential recipient of Work Fee
Warrants and the Incentivisation Warrants. In accordance with the UK Listing
Rules, the Chairman has not participated in the Board’s decision-making or
voted on the relevant board resolutions in relation to the Transactions and
has made no recommendation. Accordingly, the Chairman cannot recommend that
Shareholders vote in favour of the Resolutions but has undertaken to vote in
favour of the Resolutions in respect of his own legal and beneficial holdings,
amounting to 22,458,525 Existing Shares (representing approximately 11.6% of
the Company's existing issued ordinary share capital as at the Latest
Practicable Date) and encourages Shareholders to vote on the Resolutions.
Incentivisation arrangements update
The Board of Petra has approved the amendment of the terms of the
Incentivisation Plan as were set out in the Refinancing Announcement to amend
the exercise price of the Incentivisation Warrants from 50 pence to 35 pence
per Ordinary Share. The implementation of the Incentivisation Plan is subject
to shareholder approval at the Special General Meeting.
The amendment to the exercise price of the Incentivisation Warrants to be
granted to José Manuel Vargas, as Chairman, pursuant to the Incentivisation
Plan is considered a material change to related party transaction for the
purposes of UKLR 8.2.5R, and so constitutes a further related party
transaction (the " Related Party Transaction
").
In respect of the Related Party Transaction, the Board (excluding the Chairman
by virtue of his personal conflict) having been so advised by Peel Hunt LLP
acting in its capacity as the Company's Sponsor, unanimously considers the
Related Party Transaction is fair and reasonable as far as Petra shareholders
are concerned.
Prospectus
The Prospectus containing full details of the Rights Issue is expected to be
made available on the Company's website (
www.petradiamonds.com ), subject to certain
restrictions, later today.
This summary should be read in conjunction with the full text of this
announcement and its appendix below, together with the Prospectus. Further,
this summary contains extracts from the Letter from the Chairman in the
Prospectus (expected to be made available on the Company's website at
www.petradiamonds.com
later today), which extracts are qualified and/or contextualised by, and
should be read with, the Prospectus.
The Prospectus will also be submitted to the National Storage Mechanism and
available for viewing at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
Capitalised terms used in this announcement shall, unless otherwise defined,
have the same meanings as set out in the Prospectus and the Definitions
section contained in this announcement.
Indicative abridged timetable of principal events
Publication of the Prospectus and the Notice of Special General Meeting 17 October 2025
Posting of the Prospectus and the Notice of Special General Meeting 18 October 2025
Latest time and date for receipt of Forms of Direction and electronic proxy appointment via CREST or Proxymity 8:30 a.m. on 3 November 2025
Latest time and date for receipt of Forms of Proxy 8:30 a.m. on 4 November 2025
Record Date for entitlements under the Rights Issue for Qualifying Shareholders Close of business on 4 November 2025
Special General Meeting 8:30 a.m. on 6 November 2025
Despatch of Provisional Allotment Letters (to Qualifying Non-CREST Shareholders only) 6 November 2025
Existing Shares marked "ex-rights" by the London Stock Exchange 8.00 a.m. on 7 November 2025
Admission of the Rights Issue Shares and admission of, and commencement of dealings in, the Nil Paid Rights on a multi-lateral trading facility of the London Stock Exchange 8.00 a.m. on 7 November 2025
DI Nil Paid Rights enabled in CREST As soon as practicable after 8:00 a.m. on 7 November 2025
DI Nil Paid Rights credited to CREST accounts of Qualifying DI Holders As soon as practicable after 8:00 a.m. on 7 November 2025
Latest time and date for acceptance and payment through CREST in respect of DI Nil Paid Rights 11.00 a.m. on 21 November 2025
Latest time and date for acceptance, payment in full and registration of renounced Provisional Allotment Letters 11.00 a.m. on 21 November 2025
Commencement of dealings in Rights Issue Shares (fully paid) on the London Stock Exchange 8.00 a.m. on 27 November 2025
Admission of Backstop Fee Shares to trading on the Main Market of the London Stock Exchange and commencement of dealings of the Backstop Fee Shares on the Main Market of the London Stock Exchange 8.00 a.m. on 27 November 2025
For further information, please contact:
Petra Diamonds, London
Julia Stone/Kelsey Traynor
Telephone: +44 (0)7495 470 187
investorrelations@petradiamonds.com
Kroll Issuer Services Limited
Alessandro Zorza
Telephone: +44 20 7089 0909
petra@is.kroll.com
Peel Hunt LLP (Sponsor to Petra)
Ross Allister / David McKeown / Emily Bhasin
+44 (0)20 7418 8900
Herbert Smith Freehills Kramer LLP is acting as legal counsel to Petra in
connection with the Refinancing.
About Petra Diamonds Limited
Petra Diamonds is a leading independent diamond mining
group and a supplier of gem quality rough diamonds to the international
market. The Company's portfolio incorporates interests in two underground
mines in South Africa (Cullinan and
Finsch Mines).
Petra's strategy is to focus on value rather than volume production by
optimising recoveries from its high-quality asset base in order to maximise
their efficiency and profitability. The Group has a significant resource base
which supports the potential for long-life operations.
Petra strives to conduct all operations according to the highest ethical
standards and only operates in countries which are members of the Kimberley
Process. The Company aims to generate tangible value for each of its
stakeholders, thereby contributing to the socio-economic development of its
host countries and supporting long-term sustainable operations to the benefit
of its employees, partners and communities.
Petra's Ordinary Shares are admitted to the equity shares (commercial
companies) category of the FCA's Official List and are admitted to trading on
the Main Market of the London Stock Exchange
under the ticker "PDL". The Company's loan notes, due in 2026, are
listed on EuroNext Dublin (Irish Stock Exchange). For more information, visit
www.petradiamonds.com
.
Important Notices
This announcement has been issued by and is the sole responsibility of the
Company. This announcement is not a prospectus but an advertisement and
investors should not acquire any Nil Paid Rights, DI Nil Paid Rights, Rights
Issue Shares or New DIs (together, the "Securities") referred to in this
announcement except on the basis of the information contained in the
Prospectus to be published by the Company in connection with the Rights Issue.
The information contained in this announcement is for background purposes only
and does not purport to be full or complete. Copies of the Prospectus, when
published, will be available on the Company's website, provided that the
Prospectus will not, subject to certain exceptions, be available to certain
shareholders in certain restricted or excluded territories. The Prospectus
will give further details of the Rights Issue.
The information contained in this announcement is for background purposes only
and no reliance may or should be placed by any person for any purpose
whatsoever on the information contained in this announcement or on its
completeness, accuracy or fairness. Recipients of this announcement and/or the
Prospectus should conduct their own investigation, evaluation and analysis of
the business, data and property described in this announcement. This
announcement does not constitute a recommendation concerning any investor's
decision or options with respect to the Rights Issue. The information in this
announcement is subject to change.
This announcement contains statements about Petra that are or may be forward
looking statements. All statements other than statements of historical facts
included in this announcement may be forward looking statements. Without
limitation, any statements preceded or followed by or that include the words
"targets", "goals", "should", "would", "could", "continue", "plans",
"believes", "expects", "aims", "intends", "will", "may", "anticipates",
"estimates", "hopes", "projects" or words or terms of similar substance or the
negative thereof, are forward looking statements.
Such forward looking statements involve risks and uncertainties that could
significantly affect expected results and are based on certain key
assumptions. Many factors could cause actual results to differ materially from
those projected or implied in any forward looking statements. In light of
these known and unknown risks, uncertainties, contingencies, estimates and
assumptions, the events in the forward-looking statements may not occur or may
cause actual results, performance or achievements to differ materially from
those expressed by or implied from such forward-looking statements, whether as
a result of new information, future events or otherwise. Due to such
uncertainties and risks, readers are cautioned not to place undue reliance on
such forward looking statements, which speak only as of the date hereof. Petra
disclaims any obligation to update any forward looking or other statements
contained herein, except as required by applicable law or regulation.
Past performance of the Company cannot be relied on as a guide to,
or a guarantee or an indication of, future performance. No statement in this
announcement is intended to be, nor should be construed as, a profit forecast.
The distribution of this announcement, the Prospectus (once published), the
Provisional Allotment Letter (once printed), any other offering or public
material relating to the Rights Issue and/or the Transactions and/or the
transfer of Securities and/or Backstop Fee Shares through CREST or otherwise
into certain jurisdictions may be restricted by law. Therefore, persons into
whose possession this announcement comes should inform themselves about and
observe such restrictions. In particular, subject to certain exceptions, this
announcement, the Prospectus (once published) and the Provisional Allotment
Letter (once printed) should not be distributed, forwarded to or transmitted
in or into any Excluded Territory or into any other jurisdiction where to do
so might constitute a breach of any applicable law. Any failure to comply with
such restrictions may constitute a violation of the securities law of any such
jurisdiction. Subject to certain exceptions, no action has been or will be
taken by the Company, the Directors or the Sponsor to permit the possession or
issue, distribution, forwarding or transmission of this announcement, the
Prospectus or the Provisional Allotment Letter into any Excluded Territory or
where doing so may be restricted by law.
Neither the Securities nor the Backstop Fee Shares have been and will not be
registered or qualified for distribution to the public under the relevant laws
of any Excluded Territory and may not be offered, sold, taken up, exercised,
resold, removed, transferred or delivered, directly or indirectly, in or into
any Excluded Territory, except pursuant to an applicable exemption. There will
be no public offer in any Excluded Territory or in any other jurisdiction
where the extension and availability of the Rights Issue would breach
applicable law.
Subject to certain exceptions, neither this announcement, the Prospectus nor
the Provisional Allotment Letter constitutes an offer of the Securities or the
Backstop Fee Shares to any person located in, or with a registered address in,
or who is resident in, the United States. The Securities and the Backstop Fee
Shares have not been and will not be registered under the US Securities Act of
1933, as amended (the "US Securities Act") or under any securities laws of any
state or other jurisdiction of the United States and may not be offered, sold,
taken up, exercised, resold, renounced, transferred or delivered, directly or
indirectly, into or within the United States except pursuant to an applicable
exemption from, or in a transaction not subject to, the registration
requirements of the US Securities Act and in compliance with any applicable
securities laws of any state or other jurisdiction of the United States.
Subject to certain exceptions, if shareholders or prospective investors are in
the United States, they may not acquire any Securities and/or Backstop Fee
Shares offered in the Prospectus. There will be no public offer of the
Securities and the Backstop Fee Shares in the United States.
Neither this announcement, any other document connected with the Rights Issue,
the Securities nor the Backstop Fee Shares have been or will be approved,
disapproved or recommended by the US Securities and Exchange Commission, any
state securities commission in the United States or any other US regulatory
authority, nor have any of the foregoing authorities reviewed, passed upon or
endorsed the merits of the offering of the Securities or the Backstop Fee
Shares or confirmed the accuracy or completeness or determined the adequacy of
this announcement or any other document connected with the Rights Issue. Any
representation to the contrary is a criminal offence in the United States.
Notwithstanding the foregoing, the Company reserves the right to offer and
deliver the Securities and/or the Backstop Fee Shares to a limited number of
persons in the United States reasonably believed to be Qualified Institutional
Buyers (each a "QIB") as defined in Rule 144A under the US Securities Act
("Rule 144A") or Accredited Investors (each an "AI") as defined in Rule 501(a)
of Regulation D under the US Securities Act, in transactions exempt from the
registration requirements of the US Securities Act. Any person in the United
States who obtains a copy of the Prospectus or the Provisional Allotment
Letter and who is not a QIB or an AI is required to disregard it. Subject to
the above, the Securities and the Backstop Fee Shares being offered outside
the United States are only being offered in reliance on Regulation S under the
US Securities Act ("Regulation S").
Subject to the above, any envelope containing a Provisional Allotment Letter
and post-marked from the United States will not be valid unless it contains a
duly executed US Investor Representation Letter (as defined in the Prospectus)
in the appropriate form, which is accepted by the Company in writing.
Similarly, any Provisional Allotment Letter in which the exercising holder
requests Securities be issued in registered form and gives an address in the
United States will not be valid unless it contains a duly executed US Investor
Representation Letter, which is accepted by the Company at its discretion. The
payments paid in respect of a Provisional Allotment Letter that do not meet
the foregoing criteria will be returned without interest, at the risk of the
payer.
No representation has been, or will be, made by the Company or any of its
affiliates as to the availability of Rule 144 under the US Securities Act or
any other exemption under the US Securities Act or any state securities laws
for the re-offer, resale, pledge or transfer of the Securities or the Backstop
Fee Shares.
Neither the contents of the Company's website nor any website accessible by
hyperlinks on the Company's website is incorporated in, or forms part of, this
announcement.
The price of shares and any income expected from them may go down as well as
up and investors may not get back the full amount invested upon disposal of
the shares. Past performance is no guide to future performance. The contents
of this announcement are not to be construed as legal, business, financial or
tax advice. Each investor or prospective investor should consult his, her or
its own legal adviser, business adviser, financial adviser or tax adviser for
legal, financial, business or tax advice.
No person has been authorised to give any information or to make any
representations other than those contained in this announcement and, if given
or made, such information or representations must not be relied on as having
been authorised by the Company or any of its affiliates. Subject to the
UK Listing Rules, the Prospectus Regulation
Rules, the Disclosure Guidance and Transparency Rules and the UK Market Abuse
Regulation, the issue of this announcement and any subsequent announcement
shall not, in any circumstances, create any implication that there has been no
change in the affairs of the Company since the date of this announcement or
that the information contained in it is correct as at any subsequent date.
Peel Hunt LLP ("Peel Hunt"), which is authorised and
regulated in the United Kingdom by
the FCA, is acting exclusively for Petra as Sponsor and
no one else in connection with the Transactions and the matters referred to in
this announcement. Peel Hunt will not regard any other person (whether or not
a recipient of this announcement) as its client in relation to the
Transactions and the matters referred to in this announcement and will not be
responsible to anyone other than Petra for providing the protections afforded
to its clients nor for providing advice to any other person in relation to the
Transactions or any other transactions, arrangements or matters referred to in
this announcement.
Apart from the responsibilities and liabilities, if any, which may be imposed
by the Financial Services and Markets Act 2000, as amended, or the regulatory
regime established thereunder, neither Peel Hunt nor any of its affiliates,
directors, officers, employees or advisers accepts any responsibility or
liability whatsoever for or makes any representation or warranty, express or
implied, in respect of the contents of this announcement including its
accuracy, completeness or verification or for any other statement made or
purported to be made by it, or on its behalf, the Company, the Company's
directors or any other person in connection with the Company, the
Group, the Securities, the Backstop Fee Shares , the Transactions or
any matter referred to in this announcement and nothing in this announcement
is or shall be relied upon as a promise or representation in this respect,
whether as to the past or future. Each of Peel Hunt and its affiliates,
directors, officers, employees and advisers accordingly disclaims, to the
fullest extent permitted by law, all and any responsibility or liability
whatsoever, whether arising in tort, contract or otherwise (save as referred
to above) which it might otherwise have in respect of this announcement or any
such statement.
Information to Distributors
Solely for the purposes of the product governance requirements of Chapter 3 of
the FCA Handbook Product Intervention and Product Governance Source book (the
“UK Product Governance Requirements”) and disclaiming all and any
liability, whether arising in tort, contract or otherwise, which any
“manufacturer” (for the purposes of the UK Product Governance
Requirements) may otherwise have with respect thereto, the Securities and the
Backstop Fee Shares have been subject to a product approval process, which has
determined that they each are: (i) compatible with an end target market of
retail investors and investors who meet the criteria of professional clients
and eligible counterparties, each as defined in Chapter 3
of the FCA Handbook Conduct of Business Source book; and (ii) eligible for
distribution through all distribution channels as are permitted (the “Target
Market Assessment”). Notwithstanding the Target Market Assessment,
distributors should note that: the price of the Securities and the Backstop
Fee Shares may decline and investors could lose all or part of their
investment; the Securities and the Backstop Fee Shares offer no guaranteed
income and no capital protection; and an investment in the Securities and the
Backstop Fee Shares is compatible only with investors who do not need a
guaranteed income or capital protection, who (either alone or in conjunction
with an appropriate financial or other adviser) are capable of evaluating the
merits and risks of such an investment and who have sufficient resources to be
able to bear any losses that may result therefrom. The Target Market
Assessment is without prejudice to the requirements of any contractual, legal
or regulatory selling restrictions in relation to the Rights Issue. For the
avoidance of doubt, the Target Market Assessment does not constitute: (a) an
assessment of suitability or appropriateness for the purposes of MiFID II; or
(b) a recommendation to any investor or group of investors to invest in, or
purchase, or take any other action whatsoever with respect to the Securities
and the Backstop Fee Shares. Each distributor is responsible for undertaking
its own target market assessment in respect of the Securities and the Backstop
Fee Shares and determining appropriate distribution channels.
Appendix
Introduction
On 8 August 2025, the Company announced it had reached agreement in principle
with its financial stakeholders for a long-term solution for the refinancing
of the Group. This is the outcome of extensive engagement with the Company’s
financial stakeholders to refinance the Group’s senior secured bank debt
facilities and 9.75% senior secured second lien notes (ISINs XS2289895927 and
XS2289899242) following a strategic internal restructuring programme to
simplify and streamline the business and operating model.
The Refinancing comprises:
* an extension to the maturity date of the Senior Secured Bank Debt
from January 2026 to December 2029, alongside certain other changes to the
terms of the Senior Secured Bank Debt;
* an extension to the maturity date of the Notes from March 2026 to
March 2030 alongside concurrent amendments to the Notes, including the
introduction of a “payment in cash or equity” mechanism which allows the
Notes Issuer to make interest payments on the Notes in Ordinary Shares rather
than cash, at the Notes Issuer’s discretion, and an increase in the cash
interest rate to 10.5% (or 11.5% if the Notes Issuer uses equity to make
interest payments); and
* a rights issue of approximately £18.8 million (equivalent to
approximately US$25.1 million) at an issue price of 16.5 pence per Rights
Issue Share, fully underwritten and committed by the Backstop Shareholders.
The Notes Refinancing will be implemented by way of the Consent Solicitation
process. On 17 October 2025, the Notes Issuer launched the Consent
Solicitation requesting (i) approval of the terms of an amended and restated
indenture, on the basis of conditions set forth in a third supplemental
indenture; (ii) that the Notes Trustee execute the Implementation Deed setting
out the steps required to complete the Refinancing; and (iii) that the Notes
Trustee execute the Amended Intercreditor Agreement; and (iv) that the Notes
Trustee execute the Deed of Release.
As a result of the agreement by Noteholders representing over 99% of the
outstanding principal amount of the Notes to support the Consent Solicitation
under the Lock-Up Agreement, the Company expects that the requisite consents
to effect the amendments to the Notes will be received promptly after the
launch of the Consent Solicitation, shortly following which the Notes Trustee
will be directed to execute the Implementation Deed.
The Implementation Deed sets out (among other things) the steps required to be
taken to complete the Refinancing (including the amendment of the Notes and
the extension of the maturity date in respect of the Senior Secured Bank
Debt). As at the date of this announcement, the Implementation Deed has been
substantially agreed by all of the relevant parties to it and the
Implementation Deed is expected to be executed after the requisite consents
have been provided under the Consent Solicitation (and before the Special
General Meeting).
The Rights Issue is fully underwritten and committed by the Backstop
Shareholders who have agreed, pursuant to the terms of the Backstop Agreement,
to underwrite the Rights Issue at a price of 16.5 pence per Rights Issue
Share.
In connection with the Rights Issue and the Refinancing, the Company is
proposing:
* for their services underwriting the Rights Issue, the Company to
pay the Backstop Fee to each Backstop Shareholder. The Backstop Fee is equal
to 10% of the value of the Rights Issue Shares that such Backstop Shareholder
has irrevocably undertaken to subscribe for, being (i) in relation to each
Backstop Shareholder, their respective pro rata rights under Rights Issue and
(ii) in relation to Kyma Capital, JOSIVAR Sarl, Mecamur S.L., Vivek Gadodia
and Jozephus Kemp only, the remaining rights under the Rights Issue of any
other Shareholder (other than the Backstop Shareholders) who do not take up
their rights. The Backstop Fee will be paid in new Ordinary Shares in the form
of the Backstop Fee Shares;
* as part of the Notes Refinancing, to pay the interest on the
amended Notes in cash or the issuance of PICE Shares in accordance with the
PICE Mechanism;
* the implementation of the Incentivisation Plan for the benefit of
the management, the Chairman and other senior managers of the Company with a
grant of up to 16 million Incentivisation Warrants in total, with up to 3.75
million Incentivisation Warrants for the benefit of the Chairman and up to
12.25 million Incentivisation Warrants for the benefit of management and
senior managers, at an exercise price of 35 pence per Ordinary Share; and
* in order to incentivise engagement and ensure support from key
stakeholders, to grant 48 million Work Fee Warrants to the members of the
working group of holders of the Notes (the “ Working
Group ”) at an exercise price of 20 pence per Ordinary
Share,
(together, with the Rights Issue and the Refinancing, the “
Transactions ”).
The issue of the new Ordinary Shares in connection with the Rights Issue, the
Backstop Fee, the PICE Mechanism, the approval of the Incentivisation Plan
(and the associated amendments to the Remuneration Policy) and the grant of
the Incentivisation Warrants and the Work Fee Warrants, will all require
shareholder approval.
Accordingly, the Company has convened a Special General Meeting for 8:30 a.m.
(London time) on 6 November 2025 at the offices of Herbert Smith Freehills
Kramer LLP, Exchange House, Primrose Street, London EC2A 2EG, United Kingdom.
The Company has received irrevocable undertakings to vote (or to procure the
vote) in favour of the Transactions at the Special General Meeting from
certain Shareholders (including the Backstop Shareholders, Shareholders who
are subject to the Lock-Up Agreement and each of the Directors who hold
Ordinary Shares) who hold, in aggregate, approximately
74.2% of the Company’s total voting rights.
As explained in the paragraph Working capital statement
below, the Directors believe that it is of fundamental
importance that the Refinancing completes, which itself is conditional on the
Rights Issue. The Refinancing and the Rights Issue are both conditional on the
Refinancing Resolutions being passed by Shareholders at the Special General
Meeting and, accordingly in the event that the Refinancing Resolutions are not
passed, the Rights Issue and the Refinancing will not proceed. In such
circumstances, the Company is of the opinion that the Group will not have
sufficient working capital for its present requirements, that is, for at least
the next 12 months from the date of this announcement, and there would be
significant uncertainty regarding the Group’s ability to continue as a going
concern, which may have a material adverse impact on the value of
Shareholders’ investment in the Company and may cause Shareholders to lose
all or a substantial portion of their investment.
Background to, and reasons for, the Transactions
The Group
The Company is a leading independent diamond mining group and a supplier of
gem and near-gem quality rough diamonds to the international market. The
Company’s portfolio incorporates interests in two producing underground
mining operations in South Africa: Cullinan Mine and Finsch.
* Cullinan Mine : an underground
mine using block caving and sublevel caving, renowned for producing large,
high quality white and very rare blue diamonds.
* Finsch : an underground mine
using sublevel caving. Finsch regularly produces high quality commercial
diamonds of over five carats and occasionally produces diamonds of over 50
carats together with smaller gem quality diamonds.
Over the period FY 2020 to FY 2025 (excluding operations disposed of in this
period), the Company has produced a total of 16.9 Mcts, generating revenue of
approximately US$1.9 billion, operating cash flow (before capital expenditure)
of US$726.6 million and thereby facilitating capital expenditure of
approximately US$325 million. In FY 2025 the Group produced 2.4 Mcts of rough
diamonds and generated US$207 million of revenue.
For the year ended 30 June 2025, the Group generated Profit from Mining
Activities of US$33 million, Adjusted EBITDA of US$27 million and an Adjusted
EBITDA Margin of 13%. As at 30 June 2025, the Group had cash and cash
equivalents of US$37 million.
The Company’s Existing Shares have been admitted to trading on the Main
Market since 2011, under the ticker PDL.
Background to and reasons for the Refinancing
Background to the refinancing challenges
In FY 2021, the Company implemented a long-term restructuring, principally
through a debt for equity conversion, to provide additional liquidity and
reduce the overall principal amount of debt and interest payable.
FY 2022 and the first half of FY 2023 saw strong consumer demand following the
lifting of COVID-19 restrictions and the optimism of renewed Chinese demand,
resulting in diamond prices reaching record highs in FY 2022. However, the
second half of FY 2023 saw the softening of diamond prices, exacerbated by a
build-up in polished diamond inventories following the end of COVID-19
restocking and a challenging macroeconomic backdrop, leading to a two-month
Indian diamond import moratorium between September 2023 and December 2023. As
a result of the Indian moratorium and the uncertainty at the time, the Group
significantly reduced the mine extension capital projects from late 2023 up to
June 2024 and pursued cost savings initiatives. These cost-reduction measures
and deferral of capital projects resulted in a reduction of cash outflows by
US$75 million in FY 2024.
In November 2022, the Williamson Mine suffered a tailings storage failure,
which saw all production activities suspended for seven months, only ramping
up to full production in the second half of FY 2024.
The diamond industry has continued to face unprecedented challenges, with
significant pressure on rough diamond prices continuing in FY 2024 and FY
2025, as a result of continued high pipeline inventories, weaker demand from
key markets, particularly the prolonged slowdown in China, and increased
competition from LGDs (which are estimated by industry expert Paul Zimnisky to
account for 20% of global diamond jewellery demand in 2024), as well as an
unstable geopolitical landscape. This has led to the average like-for-like
diamond price down 37% across the industry in FY 2025 compared to the
post-COVID-19 high of FY 2022. Fluctuations in diamond prices have been
exacerbated by the series of tariffs announced by the US, particularly in
relation to US tariffs on India, as India cuts and polishes the vast majority
of all diamonds mined globally, and the US accounts for approximately 50−55%
of the natural diamond demand. Although some diamond cutters in India may have
the capability to shift their location to mitigate the impacts of US tariffs,
to do so would be a lengthy process.
However, more recently some positive momentum is being seen in the market,
with 3% improvement in the like-for-like prices for diamonds sold in Tender 7
in June 2025 across most product categories as compared to Tenders 5 and 6 in
April and June 2025. The underlying structural supply deficit faced by the
global diamond market is expected only to increase as a result of the
continued contraction in the number of producing diamond mines and has the
potential to support the recovery of diamond prices over the medium to long
term, with volatility foreseen in diamond prices in the short term on account
of the factors noted above.
Internal restructuring programme
Over the past 18 months, in light of the challenges created by the significant
volatility in diamond prices, the Company has undertaken a number of measures,
including an internal restructuring programme aimed at repositioning itself
for long-term sustainability and improved operational efficiency. Key elements
of this programme have included the disposal of the Koffiefontein diamond mine
(" Koffiefontein ") in South Africa,
completed on 18 October 2024, and the disposal of the Williamson Mine in
Tanzania, completed on 14 May 2025, the implementation of multiple labour
restructuring initiatives, and an optimisation and smoothing of the Group’s
capital development profile, through deferral of capital programmes and
revising LOM plans, across its remaining operations.
These measures have included in FY 2024 and FY 2025:
* Capital expenditure reduction :
On 1 November 2023, the Company announced a deferral of capital programmes,
reducing FY 2024 capital expenditure by over US$65 million. This required a
revision of the Company’s LOM plans for Finsch and Cullinan Mine with the
aim to increase resilience and be able to withstand weaker-for-longer market
cycles, while keeping future production profiles intact. This has resulted in
a smoothed capital profile, with average annual
capital expenditure projected at approximately US$100 million from FY 2025
onwards, the rebasing of Finsch to approximately 2.2 million tonnes per annum
(“ Mtpa ”), with the potential
to continue mining into late 2030 and the rebasing of Cullinan Mine to
approximately 3.7 Mtpa from FY 2027 onwards, with the potential to continue
mining into the early 2040s without the need for a new production shaft.
* Cost Saving s: US$10 million
one-off operating and group cash savings were implemented during FY 2024,
alongside a re-based operating cost profile that results in US$30 million in
sustainable cost reductions against prior guidance and a further optimised
capital profile for FY 2025 and beyond. As part of this, Group functions were
decentralised, resulting in a reduction of approximately 80 roles and a
reduction in planned production levels at Finsch from 2.8 Mtpa to 2.2 Mtpa
impacting approximately 350 positions. In addition, the Group executed a
series of measures, including reducing corporate overheads, optimising
procurement, and a labour restructuring program, which included a material
retrenchment and voluntary departures of 188 positions at the Cullinan Mine.
The Group also reduced the number of Board Directors and reduced fees,
resulting in a 25% reduction in Board costs on an annualised basis.
* Asset sales : The sale of the
Company’s interest in Koffiefontein completed on 18 October 2024 and as a
result the Group has avoided closure costs of US$23 million. In addition, the
sale of the Williamson Mine in Tanzania was completed on 14 May 2025 for a
headline deferred consideration of up to US$16 million, however the deferred
consideration is dependent on the future cash generation of WDL and is
therefore inherently uncertain.
The Refinancing
Following this operational restructuring, the Company has engaged extensively
with its key financial stakeholders to address the upcoming maturities of its
financial indebtedness. In particular, the Senior Secured Bank Debt and the
Notes are due to mature in January 2026 and March 2026, respectively. Given
the importance of ensuring a stable capital structure to support the long-term
business plan, the Board determined that a comprehensive refinancing would be
necessary to address these maturities in an orderly manner and to underpin the
Group’s future strategy.
Following extensive negotiations, on 8 August 2025 the Company announced it
had reached agreement with key stakeholders, including the Senior Secured Bank
Debt Lender, the Working Group, and certain existing shareholders, on a
holistic refinancing solution. This included the execution of the Lock-Up
Agreement with the Noteholders holding, in aggregate, approximately 86% of the
Notes (by value), pursuant to which the parties undertook to take all actions
necessary in order to implement the Refinancing and not to delay or prevent
the implementation of the Refinancing. Alongside the Lock-Up Agreement, the
Company entered into the Backstop Agreement with the Backstop Shareholders,
pursuant to which the Backstop Shareholders committed to fully commit and
underwrite the Rights Issue and to vote (or to procure the vote) in favour of
the Resolutions to effect the Refinancing and the Rights Issue.
Since the execution of the Lock-Up Agreement, additional Noteholders holding,
in aggregate, approximately 13 % of the Notes (by value) acceded to the
Lock-Up Agreement, such that the Notes Refinancing has the support of
Noteholders holding, in aggregate, approximately 99% of the Notes (by value)
and as such, the Notes Refinancing will be implemented by way of the Consent
Solicitation pursuant to which the Notes Trustee will be directed to execute
the Implementation Deed for the Refinancing. As at the date of this
announcement, the Implementation Deed has been substantially agreed by all of
the relevant parties to it and the Implementation Deed is expected to be
executed after the requisite consents have been provided under the Consent
Solicitation (and before the Special General Meeting).
In addition, Shareholders holding 69.1% of the Company’s Ordinary Shares
have acceded to the Backstop Agreement, such that the Company has irrevocable
undertakings to vote (or to procure the vote) in favour of the Resolutions at
the Special General Meeting from Shareholders (including the Backstop
Shareholders, Shareholders who are subject to the Lock-Up Agreement and each
of the Directors who hold Ordinary Shares) who hold, in aggregate,
approximately 74.2% of the Company’s total voting rights. Under the Backstop
Agreement, the Backstop Shareholders have each undertaken to subscribe for
Rights Issue Shares at a price of 16.5 pence per Rights Issue Share, such that
the Rights Issue is fully underwritten and committed.
On 29 September 2025, the Company entered a binding commitment letter with the
Senior Secured Bank Lender (the “ Commitment Letter
”).
The key elements of the Refinancing are as follows:
* the extension of the maturity date of the Senior Secured Bank
Debt to December 2029, together with certain amendments to the terms of that
facility;
* the amendment and extension of the Notes, including an extension
of the maturity date to March 2030, together with amended interest payment
provisions that provide the Company with flexibility to pay interest in cash
or in ordinary shares, at its discretion; and
* the Rights Issue of approximately £18.8 million (equivalent to
approximately US$25.1 million).
The Directors believe that these elements together represent an integrated
solution designed to address the Group’s near-term refinancing needs,
provide operational and financial flexibility, and underpin a sustainable
capital structure.
Use of proceeds
The Rights Issue is expected to raise gross proceeds of approximately £18.8
million (equivalent to approximately US$25.1 million) and approximately £16.8
million equivalent to approximately (US$22.4 million) in net proceeds.
The Directors expect the Group to use the entire net proceeds for general
working capital purposes, as required by the Group.
Key terms of the Refinancing, the Rights Issue and related proposals
Debt Refinancing
In connection with, and conditional on, the Notes Refinancing and the Rights
Issue, the Company has, pursuant to the Commitment Letter, agreed with the
Senior Secured Bank Debt Lender to (subject to the satisfaction of the
conditions in the Commitment Letter, the Implementation Deed and any other
relevant documentation) amend the terms of the existing Senior Secured Bank
Debt. The Amended Senior Secured Bank Debt is intended to become effective on
or around the same time that the Notes Refinancing and the Rights Issue are
completed.
The key terms of the Amended Senior Secured Bank Debt will be as follows:
* an extension of the maturity of the R1,750 million revolving
credit facility to December 2029 from January 2026;
* a revised margin of JIBAR plus 500 basis points (from the current
JIBAR plus 415 basis points);
* an agreed amortisation profile that will result in a reduction of
the R1,750 million facility to R1,000 million by end of June 2029;
* an updated financial covenant package to reflect prevailing
market standards for facilities of this nature and consistent with the
Group’s anticipated capital structure following implementation of the
Refinancing and Rights Issue, including adjustments to the leverage ratio
test, the interest cover ratio test, and the minimum liquidity covenant (among
other things);
* updated cashflow protocols and basket limits; and
* an upfront fee of 75 basis points to be paid over the term of the
facility, with the commitment fee of 125 basis points remaining unchanged.
The Amended Senior Secured Bank Debt is conditional on (among other things)
the Notes Refinancing and the Rights Issue being implemented in accordance
with the Implementation Deed and the SARB Approval.
Pursuant to the Senior Secured Bank Debt Waiver Letter as amended on 12
September 2025, the Company has received waivers and restrictions on
enforcement from the Senior Secured Bank Debt Lender in relation to certain
breaches of the terms of the Senior Secured Bank Debt to 31 December 2025.
The Amended Senior Secured Bank Debt will become effective following
completion of the Implementation Steps (as defined below) pursuant to the
terms of, and the steps set out in, the Implementation Deed (as set out
further in the paragraph Rights Issue
below).
Notes Refinancing
Summary of the Notes Refinancing
The Notes Refinancing will be implemented by way of the Consent Solicitation
process. On 17 October 2025, the Notes Issuer launched the Consent
Solicitation requesting (i) approval of the terms of an amended and restated
indenture, on the basis of conditions set forth in a third supplemental
indenture; (ii) that the Notes Trustee execute the Implementation Deed; and
(iii) that the Notes Trustee execute the Amended Intercreditor Agreement; and
(iv) that the Notes Trustee execute the Deed of Release.
As a result of the agreement by Noteholders representing over 99% of the
outstanding principal amount of the Notes to support the Consent Solicitation
under the Lock-Up Agreement, the Company expects that the requisite consents
to effect the amendments to the Notes will be received promptly after the
launch of the Consent Solicitation, shortly following which the Notes Trustee
will be directed to execute the Implementation Deed.
The Implementation Deed sets out (among other things) the steps required to be
taken to complete the Refinancing (including the amendment of the Notes and
the extension of the maturity date in respect of the Senior Secured Bank
Debt). As at the date of this announcement, the Implementation Deed has been
substantially agreed by all of the relevant parties to it and the
Implementation Deed is expected to be executed after the requisite consents
have been provided under the Consent Solicitation (and before the Special
General Meeting).
Once the Implementation Deed is executed and the Implementation Documents are
in agreed form between the relevant parties, the Notes Trustee and the Senior
Secured Bank Debt Lender and other relevant parties in respect of the Senior
Secured Bank Debt will (in accordance with the terms of the Implementation
Deed) also provide their undated and unreleased signatures to those
Implementation Documents to the Company’s Counsel so that the relevant
signatures can (subject to the satisfaction of the relevant conditions) be
released prior to Completion pursuant to the terms of the Implementation Deed.
As at the date of this announcement, drafts of each of the key Implementation
Documents are in an advanced form and the Company does not anticipate that
there will be any issues with finalising any of the Implementation Documents
prior to the date of the Special General Meeting.
The key terms of the Amended Notes will be as follows:
* the maturity date is extended to March 2030 from March 2026;
* interest on the Amended Notes is payable in cash, PICE Shares or
a combination of cash and PICE Shares, which will be at the Notes Issuer’s
discretion (except as noted below);
* interest of the Notes will accrue at a rate of 10.5% per annum if
paid in cash, and 11.5% per annum if paid in PICE Shares;
* where the PICE Mechanism is exercised, the number of PICE Shares
to be issued by the Company and allotted to the Noteholders shall be
calculated by dividing the relevant interest amount by the following share
prices: (i) in Year 1 (FY 2026), 50 pence per Ordinary Share; (ii) in Year 2
(FY 2027), an amount equal to the 12-month volume weighted average price of
the Ordinary Shares; and (iii) in Year 3 (FY 2028) onwards, an amount equal to
50% of the 120-day volume weighted average price of the Ordinary Shares. The
Company’s current intention is to exercise the PICE Mechanism for the
interest due in December 2025; and
* solely with respect to interest due on 31 December 2025, interest
will be paid based on a blended interest calculation, such that accrued
interest from 30 June 2025 to (but excluding) 8 August 2025 shall be paid in
cash at 9.75% per annum, with the balance of the interest paid in Ordinary
Shares.
Pursuant to an amendment made to the Lock-Up Agreement on 25 September 2025,
the Company and Noteholders party to the Lock-Up Agreement representing more
than 99% of the outstanding aggregate principal amount of the Notes agreed to
amend to the terms of the Lock-Up Agreement as announced on 8 August 2025,
including the removal of a consent fee payable in additional Notes on
Completion in an amount equal to 4% of the aggregate principal amount of Notes
for which a Noteholder provided consent (the “ Consent
Fee ”) and the removal of a proposed reduction to the
principal amount of the Notes.
In addition, pursuant to the amendment to the Lock-Up Agreement on 25
September 2025 and the Notes Waiver, the Company has received waivers and
restrictions on enforcement from the Noteholders party to the Lock-Up
Agreement in relation to certain potential breaches of the terms of Notes.
The Amended Notes will become operative following completion of the
Implementation Steps (as defined below) pursuant to the terms of, and the
steps set out in, the Implementation Deed (as set out further below) and the
delivery of a notice to the Notes Trustee.
Implementation Deed
The purpose of the Implementation Deed is to give effect to certain steps
contemplated by the Lock-Up Agreement and to formalise the consents,
directions, waivers, conditions, steps and timings required to implement the
Refinancing.
The Implementation Deed sets out the steps required to complete the
Refinancing (the “Implementation Steps”), with the key steps being:
* finalising the outstanding Implementation Documents;
* once the Implementation Documents are in agreed form, the
relevant parties to provide their undated and unreleased signatures to those
Implementation Documents to the Company’s Counsel so that the relevant
signatures can be released (subject to the satisfaction of the relevant
conditions) prior to Completion pursuant to the terms of the Implementation
Deed;
* the Company to hold the Special General Meeting within 30
business days of satisfaction of the initial restructuring conditions, with
the main outstanding initial restructuring conditions as at the date of this
announcement being the receipt of the requisite consents under the Consent
Solicitation; execution of the third supplemental indenture in respect of the
Notes; confirmation that all relevant signatures in respect of the
Implementation Documents are being held in escrow by the Company’s Counsel;
receipt of the SARB Approval; and confirmation that the condition precedents
for the Amended Senior Secured Bank Debt have been satisfied or waived (other
than those which can only be satisfied by the completion of the Implementation
Steps));
* the Company to use its best endeavours to procure that all
subsequent restructuring conditions are satisfied or waived in accordance with
the terms of the Implementation Deed as soon as practicable following the date
on which the Refinancing Resolutions have been validly passed at the Special
General Meeting, with the main subsequent restructuring
conditions being the
receipt of £18.8
million (equivalent to
approximately US$25.1 million) from the Rights Issue,
receipt of the SARB Approval, payment by the Company of all due and payable
fees and expenses and confirmation that any remaining condition precedents for
the Amended Senior Secured Bank Debt have been satisfied or waived); and
* once all the subsequent restructuring conditions are satisfied or
waived, the Company to date and release all of the Implementation Documents
(in the order specified in the Implementation Deed) and (subject to the
satisfaction of any customary insolvency searches) any relevant legal opinions
in connection with the Implementation Documents will be issued and any
remaining ancillary implementation steps will be taken; at such point the
Amended Notes will become operative and the Amended Senior Secured Bank Debt
will become effective and the Refinancing will complete.
The Implementation Deed will terminate automatically on the earlier of: (i)
termination of the Lock-Up Agreement becoming effective for all parties; (ii)
the date on which all of the Implementation Steps have been completed; and
(iii) 31 December 2025 (unless otherwise extended in accordance with the
Lock-Up Agreement, but no later than 31 March 2026). The Implementation Deed
also contains certain other customary termination events.
Work Fee
In connection with the Notes Refinancing, the Working Group will receive an
additional work fee of 48 million Warrants at an exercise price of 20 pence
per Ordinary Share (or such lower number of warrants and/or lower exercise
price agreed in writing between the Company and the majority of the
participating Working Group Noteholders) payable on Completion. The number of
Work Fee Warrants that will be received by each member of the Working Group
will be agreed between the Members of the Working Group and notified to the
Company in writing ahead of Completion.
The Work Fee Warrants will not be admitted to listing or trading in any
jurisdiction. Application for the admission of the new Ordinary Shares issued
upon the exercise of the Work Fee Warrants to listing on the ESCC Category of
the Official List of the FCA and to trading on the Main Market will be made at
a later date.
Under the terms of the warrant instrument in respect of the Work Fee Warrants
to be entered into by the Company prior to Completion in accordance with the
terms of the Implementation Deed (the “ Work Fee Warrant
Deed ”), the Work Fee Warrants shall have an exercise
price of 20 pence per Ordinary Share and shall be exercisable by the relevant
warrant-holder at any time prior to March 2030, at which point the Work Fee
Warrants will lapse.
Rights Issue
Summary of the Rights Issue
A key term of the Debt Refinancing and the Notes Refinancing is the completion
of the Rights Issue to raise gross proceeds of approximately £18.8 million
(equivalent to approximately US$25.1 million). The Company is therefore
proposing to offer 114,236,344 Rights Issue Shares in connection with Rights
Issue to Shareholders who hold Ordinary Shares on the Company’s register of
members at the Record Date (the " Qualifying Shareholders
") other than, subject to certain exemptions, to those
Qualifying Shareholders with a registered address, or resident, in one of the
Excluded Territories. The Rights Issue will be made on the basis of 10 Rights
Issue Shares for every 17 Existing Shares held by and registered in the names
of the Qualifying Shareholders, at an Issue Price of 16.5 pence per Rights
Issue Share.
For more information on the Rights Issue, see the paragraph
Key terms of the Rights Issue below.
Backstop
In connection with the Rights Issue, the Backstop Shareholders have entered
into the Backstop Agreement, pursuant to which they have each undertaken to
commit and underwrite the Rights Issue at a price of 16.5 pence per Rights
Issue Share, such that the Rights Issue is fully underwritten and committed.
Under the terms of the Backstop Agreement, each Backstop Shareholder has
undertaken, subject to the conditions therein:
* to vote (or procure the voting of) all Ordinary Shares held by
them in favour of the Resolutions at the Special General Meeting;
* not to sell, transfer or otherwise dispose or charge all or any
of its Ordinary Shares in the Company;
* to subscribe in full its pro rata entitlement under the Rights
Issue as set out in the Backstop Agreement; and
* in the case of Kyma Capital, JOSIVAR Sarl, Mecamur S.L., Vivek
Gadodia and Jozephus Kemp only, to take up the rights under the Rights Issue
of any other Shareholder (other than the Backstop Shareholders) who do not
take up their rights, such that the Rights Issue is fully committed and
underwritten.
Following Admission of the Rights Issue Shares (nil paid), the Backstop
Agreement is not capable of being terminated.
Backstop Fee
In consideration for providing the underwriting commitments under the Backstop
Agreement and the associated restrictions on dealing, the Company has agreed
to a Backstop Fee payable to the Backstop Shareholders. The Backstop Fee is
equal to 10% of the value of the Ordinary Shares that such Backstop
Shareholder has irrevocably undertaken to subscribe for in relation to (i)
their respective pro rata rights under Rights Issue and (ii) in relation to
Kyma Capital, JOSIVAR Sarl, Mecamur S.L., Vivek Gadodia and Jozephus Kemp
only, the remaining rights under the Rights Issue of any other Shareholder
(other than the Backstop Shareholders) who do not take up their rights.
The Backstop Fee will be paid in New Ordinary Shares, with the Company issuing
11,423,634 Backstop Fee Shares to the Backstop Shareholders on or around 27
November 2025.
Incentivisation Plan
In connection with the Refinancing, the Company will implement the
Incentivisation Plan, to grant up to 16 million Incentivisation Warrants in
total, with up to 3.75 million Incentivisation Warrants for the benefit of the
Chairman and up to 12.25 million Incentivisation Warrants for the benefit of
management and senior managers. The Incentivisation Warrants will be issued at
an exercise price of 35 pence per Ordinary Share, with one-third vesting at
each of Completion, the first anniversary of Completion and the second
anniversary of Completion. The Incentivisation Warrants will have an exercise
period of four years from Completion, subject to customary provisions
regarding good and bad leaver terms and corporate events.
The Incentivisation Warrants will not be admitted to listing or trading in any
jurisdiction. Application for the admission of the new Ordinary Shares issued
upon the exercise of the Incentivisation Warrants to listing on the ESCC
Category of the Official List of the FCA and to trading on the Main Market
will be made at a later date.
In connection with the Incentivisation Plan, the Company is proposing to
revise the Remuneration Policy. The revised Remuneration Policy is set out in
the Directors’ Remuneration Report within the 2025 Financial Statements.
Shareholders will be asked to approve the Incentivisation Plan and the revised
Remuneration Policy at the Special General Meeting.
Current trading and prospects
Post 30 June 2025, the Group has been focusing on execution of its updated
business plan. Cullinan Mine completed its transition from a 24/7 continuous
operation to a three-shift operation and although it experienced some early
transition-related productivity issues, the Cullinan Mine has made significant
strides in settling into the new production schedule. Encouragingly, the
product mix at Cullinan Mine continues to improve as the Group opens up new
production areas. At Finsch, it has been a steady production quarter, with the
focus being on ensuring the Group’s capital execution remains on track to
open up new parts of the ore body at Finsch.
The market has remained volatile since 30 June 2025, with the higher US
tariffs on India being the biggest factor affecting the rough diamond market.
The Company has held two tenders since 30 June 2025 achieving prices ahead of
the Company’s guidance for Cullinan Mine goods, on the back of a stronger
product mix, while achieving prices within the Company’s guidance range for
Finsch, for the two tenders combined despite a variation in product mix from
the second tender versus the first tender for FY 2026. In the Company’s
second tender for FY 2026, held in September 2025, it achieved revenue of
approximately US$26 million through the sale of 224,352 carats, with the
Cullinan Mine achieving approximately US$155 per carat and Finsch achieving
approximately US$70 per carat.
Key terms of the Rights Issue
General
The Company is proposing to raise gross proceeds of approximately £18.8
million (equivalent to approximately US$25.1 million) by way of the Rights
Issue.
The Rights Issue will be made on the basis of:
10 Rights Issue Shares for every 17 Existing Shares
held by and registered in the name of Qualifying Shareholders at 6:00 p.m.
(London time) on the Record Date.
The Company is proposing to offer 114,236,344 Rights Issue Shares
(representing approximately 58.8% of the Company’s existing issued share
capital and 35.7% of the Enlarged Issued Share Capital) in connection with the
Rights Issue to Qualifying Shareholders other than, subject to certain
exemptions, to those Qualifying Shareholders with a registered address, or
resident, in one of the Excluded Territories.
The Rights Issue is being made at an issue price of 16.5 pence per Rights
Issue Share (the “ Issue Price ”),
which is payable in full on acceptance by no later than 11:00 a.m. (London
time) on 21 November 2025.
The Issue Price represents a discount of:
* approximately 14.5% to the closing middle-market price of 19.3
pence per Existing Share on 16 October 2025 (being the latest practicable date
prior to the publication of this announcement); and
* approximately 9.7% to the theoretical ex-rights price (“
TERP ”) of 18.3 pence per Existing Share
calculated by reference to the same closing price.
The Rights Issue is fully underwritten and committed by the Backstop
Shareholders who have agreed, pursuant to the terms of the Backstop Agreement,
to underwrite the Rights Issue at a price of 16.5 pence per Rights Issue
Share.
The Rights Issue is conditional, inter alia
, upon:
(i) the passing of the Refinancing Resolutions
(without amendment) at the Special General Meeting;
(ii) the Backstop Agreement having become
unconditional in all respects (save for the condition relating to Admission of
the Rights Issue Shares and Backstop Fee Shares) and not having been
terminated in accordance with its terms prior to Admission of the Rights Issue
Shares and Backstop Fee Shares; and
(iii) Admission of the Rights Issue Shares becoming
effective by not later than 8:00 a.m. on 7 November 2025 (or such later time
and/or date as the Company and the Backstop Shareholders may agree, being no
later than 21 November 2025).
Both the Rights Issue and the Refinancing are conditional on the passing of
the Refinancing Resolutions at the Special General Meeting, however while the
Refinancing is conditional on completion of the Rights Issue, the Rights Issue
is not conditional on completion of the Refinancing.
As at the date of this announcement, the Company anticipates that, by the date
of the Special General Meeting, most of the requirements for completing the
Refinancing will have been completed and the remaining steps for completion of
the Refinancing—once the Refinancing Resolutions have been passed and the
SARB Approval is obtained (which the Company does not consider there to be a
material risk of not being obtained)—will be predominantly mechanical and
mostly within the control of the Company and its advisers.
In light of this, the agreement of Noteholders representing over 99% of the
outstanding principal amount of the Notes to support the Consent Solicitation
under the Lock-Up Agreement and that the Company has received irrevocable
undertakings to vote (or to procure the vote) in favour of the Resolutions at
the Special General Meeting from Shareholders who hold, in aggregate,
approximately 74.2% of the Company’s total voting
rights, the Directors expect that the Rights Issue, the Notes Refinancing and
the Debt Refinancing will complete and the Amended Senior Secured Bank Debt
and the Amended Notes will come into effect on the date on or around which the
Company receives the net proceeds from the Rights Issue.
Holdings of Existing Shares in certificated and uncertificated form will be
treated as separate holdings for the purpose of calculating entitlements under
the Rights Issue. Rights Issue Shares representing fractional entitlements
will not be allotted to Qualifying Shareholders and, where necessary,
entitlements to Rights Issue Shares will be rounded down to the nearest whole
number. Such fractional entitlements will be aggregated and given to charity
by the Depository.
The Rights Issue Shares will, when issued and fully paid, rank pari passu in
all respects with the Existing Shares, including the right to all future
dividends or other distributions made, paid or declared after the date of
issue of the Rights Issue Shares.
A Shareholder (who is not a Backstop Shareholder) who sells or otherwise
elects not to take up their Nil Paid Rights or DI Nil Paid Rights in full (or
who is not permitted to) will experience a 39.3% immediate dilution (i.e.
their proportionate interest in the Company will decrease by 39.3%) as a
consequence of the Rights Issue and the Backstop (taking into account the
Rights Issue Shares and the Backstop Fee Shares issued in connection with the
Rights Issue and the Backstop Fee) and an up to 54.3% dilution (i.e. their
proportionate interest in the Company will decrease by up to 54.3%) as a
consequence of both the Rights Issue and the Backstop (taking into account the
Rights Issue Shares and the Backstop Fee Shares issued in connection with the
Rights Issue and the Backstop Fee) and assuming that the maximum number of
PICE Shares are issued in FY2026 pursuant to the PICE Mechanism and all of the
Work Fee Warrants and Incentivisation Warrants are exercised. A Shareholder,
who is not a Backstop Shareholder, who takes up their Nil Paid Rights or DI
Nil Paid Rights in full will experience a 3.6% immediate dilution (i.e. their
proportionate interest in the Company will decrease by 3.6%) as a consequence
of the Backstop (taking into account the Rights Issue Shares and the Backstop
Fee Shares issued in connection with the Rights Issue and the Backstop Fee)
and an up to 27.4% dilution (i.e. their proportionate interest in the Company
will decrease by up to 27.4%) as a consequence of both the Rights Issue and
the Backstop (taking into account the Rights Issue Shares and the Backstop Fee
Shares issued in connection with the Rights Issue and the Backstop Fee) and
assuming that the maximum number of PICE Shares are issued in FY2026 pursuant
to the PICE Mechanism and all of the Work Fee Warrants and Incentivisation
Warrants are exercised. The actual number of PICE Shares
to be issued in FY2026 may be lower given that (1) the maximum number of PICE
Shares includes a buffer for potential exchange rate variations between the
date of the Prospectus and the relevant calculation dates under the PICE
Mechanism; and (2) whilst it is the Company's current intention to exercise
the PICE Mechanism for the interest due in December 2025, the Company
expresses no current intention as to whether or not it will exercise the PICE
Mechanism for some or all of the interest due in June 2026.
The Prospectus relating to the offer of Rights Issue
Shares pursuant to the Rights Issue and the applications to the FCA and the
London Stock Exchange for the Rights Issue Shares (nil paid and fully paid)
and the Backstop Fee Shares to be admitted to listing on the ESCC Category of
the Official List of the FCA and to trading on the Main Market is expected to
be approved by the FCA later today. It is expected that the Nil paid Rights
will be admitted to trading on a multi-trading facility of the London Stock
Exchange. No application has been made to admit the Rights Issue Shares, the
Backstop Fee Shares or the Nil Paid Rights to be admitted to listing or
trading on any other exchange.
It is expected that: (1) Admission of the Rights Issue Shares and Admission of
the Nil Paid Rights will become effective at, and dealings in the Nil Paid
Rights will commence as soon as possible on the London Stock Exchange after,
8:00 a.m. (London time) on 7 November 2025; (2) Admission and dealings in the
Rights Issue Shares (nil and fully paid) will commence on the London Stock
Exchange by 8:00 a.m. (London time) on 27 November 2025; and (3) Admission of
the Backstop Fee Shares will become effective at 8:00 a.m. (London time) on 27
November 2025 and dealings in the Backstop Fee Shares will commence on the
London Stock Exchange as soon as possible after 8:00 a.m. (London time) on
that date.
It is expected that the Nil Paid Rights (and the associated DI Nil Paid
Rights) will trade under ISIN BMG702781581.
Shareholders will not be charged expenses by the Company in respect of the
Rights Issue.
The latest time and date for acceptance and payment in full of the Rights
Issue Shares (and the associated New DIs, as appropriate) is 11:00 a.m. on 21
November 2025.
Qualifying Non-CREST Shareholders
Qualifying Non-CREST Shareholders will be sent a Provisional Allotment Letter
shortly following approval of the Refinancing Resolutions at the Special
General Meeting, which will indicate the number of Rights Issue Shares (nil
pail) provisionally allotted to such Qualifying Non-CREST Shareholders
pursuant to the Rights Issue. Qualifying Non-CREST Shareholders should note
that, other than the Provisional Allotment Letter, they will receive no
further written communication from the Company in respect of the subject
matter of the Prospectus.
Qualifying DI Holders
The Depository holds Existing Shares and accordingly will receive provisional
allotment of Rights Issue Shares (nil paid) on behalf of Qualifying DI
Holders. Subject to the fulfilment of the conditions to be set out in the
Prospectus, the Depository will pass on the provisional allotment made in its
favour to each Qualifying DI Holder (other than, subject to certain
exemptions, DI Holders with registered addresses in any Excluded Territory or
who are located or resident in any Excluded Territory (“
Restricted DI Holder ”)) on the terms and conditions to
be set out in the Prospectus and in accordance with the Deed Poll. Qualifying
DI Holders should note that they will receive no further written communication
from the Company in respect of the subject matter of the Prospectus.
Overseas Shareholders
The attention of Qualifying Shareholders who have registered addresses outside
the UK, or who are resident or located in, or who are citizens of, countries
outside the UK, or who are holding Existing Shares for the benefit of such
persons (including, without limitation, custodians, nominees, trustees and
agents), or who have a contractual or other legal obligation to forward this
announcement, the Prospectus or the Provisional Allotment Letter to such
persons, is drawn to the information which will appear in paragraph 10 of Part
XII ( Terms and Conditions of the Rights Issue
) of the Prospectus. In particular, subject to certain limited
exceptions, the Rights Issue is not being made to Shareholders in or into any
Excluded Territory. Persons who have registered addresses in, or who are
resident or located in, or who are citizens of, countries other than the
United Kingdom should consult their professional advisers as to whether they
require any governmental or other consents or need to observe any other
formalities to enable them to take up their entitlements to the Rights Issue.
Special Dealing Service
The Company has engaged MUFG Corporate Markets (UK) Limited (the “
Receiving Agent ”) to make available the
Special Dealing Service in order for Qualifying Non-CREST Shareholders (who
are individuals and whose registered addresses are in the United Kingdom or
any other jurisdiction in the EEA) to sell all of the Nil Paid Rights to which
they are entitled or to effect a Cashless Take-up should they wish. Further
information about the Special Dealing Service will be set out in paragraph 7
of Part XII ( Terms and Conditions of the Rights Issue
) of the Prospectus and the terms and conditions of the Special
Dealing Service (the “ Special Dealing Service Terms and
Conditions ”) will be posted to Qualifying Non-CREST
Shareholders together with the Provisional Allotment Letter.
Dividends and Dividend Policy
The Directors did not recommend a dividend in respect of FY 2023, FY 2024 and
FY 2025.
The Company’s dividend policy targets an ordinary dividend within the range
of 15% to 35% of free cash flows after interest and tax, and having adjusted
for any windfall earnings. The Directors do not anticipate being in a position
to recommend a dividend in FY 2026.
Pursuant to Bermuda law, the Board is restricted from declaring or paying a
dividend, or making a distribution out of Contributed Surplus if there are
reasonable grounds for believing that: (i) the Company is, or would after the
payment be, unable to pay its liabilities as they become due; or (ii) the
realisable value of the Company’s assets would thereby be less than its
liabilities.
Irrevocable Undertakings
The Company has received irrevocable undertakings from the Backstop
Shareholders pursuant to the Backstop Agreement to vote (or to procure the
vote) in favour of the Resolutions, at the Special General Meeting in respect
of the 134,281,662 Ordinary Shares currently registered or beneficially held
in aggregate by such Shareholders, representing in aggregate approximately
69.1% of the voting rights, including the 22,458,525 Ordinary Shares currently
registered or beneficially held in aggregate by José Manuel Vargas and
JOSIVAR Sarl, an entity that is wholly-owned by José Manuel Vargas,
representing in aggregate approximately 11.6% of the voting rights. In
addition, pursuant to the Lock-up Agreement, the Company has received
irrevocable undertakings from a further Shareholder to vote (or to procure the
vote) in favour of the Resolutions, at the Special General Meeting in respect
of the 9,778,158 Ordinary Shares currently registered or beneficially held in
aggregate by such Shareholder, representing in aggregate approximately 5.0% of
the voting rights.
In addition to José Manuel Vargas, the Company has received irrevocable
undertakings from the remaining Directors who hold Ordinary Shares in the
Company to vote (or to procure the vote) in favour of the Resolutions, at the
Special General Meeting in respect of the 13,000 Ordinary Shares currently
registered or beneficially held in aggregate by such Shareholders,
representing in aggregate approximately 0.01% of the voting rights.
Furthermore, those Directors who are shareholders in the Company, with a
combined holding of approximately 11.6% in the Company’s issued share
capital, have given irrevocable undertakings to subscribe for an aggregate of
22,471,525 Rights Issue Shares, representing a combined investment by the
Board (including José Manuel Vargas and JOSIVAR SARL) of approximately
US$2,181,060.
Related Party Transactions
JOSIVAR Sarl, an entity that is wholly-owned by José Manuel Vargas, the
Company’s Chairman, José Manuel Vargas (in his personal capacity) and
Terris being a substantial shareholder in the Company, are each party to the
Lock-Up Agreement and will be party to the Implementation Deed in relation to
the Notes Refinancing and are each party to the Backstop Agreement in relation
to the Rights Issue and the Backstop. JOSIVAR Sarl is a related party of the
Company pursuant to UK Listing Rule 8.1.11R(4) by virtue of being controlled
by José Manuel Vargas, who is himself a related party of the Company as a
Director while Terris is a related party of the Company pursuant to UK Listing
Rule 8.1.11R(1) by virtue of being a substantial shareholder of the Company
(JOSIVAR Sarl, José Manuel Vargas in his personal capacity and Terris
together, the “ Related Parties ”).
As announced on 8 August 2025 and 29 August 2025 the agreed:
* amendment and extension of the Notes held by José Manuel Vargas
and Terris;
* payment by the Company of the Consent Fee to José Manuel Vargas
and Terris;
* payment by the Company of the Work Fee to José Manuel Vargas and
Terris;
* in respect of each of the Related Parties, the payment by the
Company to them of their respective proportion of the Backstop Fee;
* in respect of JOSIVAR, the proposed participation in the Rights
Issue as a Backstop Provider beyond its pro rata entitlement; and
* grants of Incentivisation Warrants under the Incentivisation Plan
to José Manuel Vargas only,
in each case in the terms set out in the Lock-Up Agreement, the Implementation
Deed (when entered into), the Backstop Agreement and the Incentivisation Plan,
are considered related-party transactions for the purposes of UKLR 8.2.1R (the
“ Initial Related Party
Transactions”).
Furthermore, the Board has amended the exercise price of the Incentivisation
Warrants granted pursuant to the Incentivisation Plan from 50 pence to 35
pence. This amendment of the exercise price in respect of the Incentivisation
Warrants granted to José Manuel Vargas only represents a material change to
the terms of the Incentivisation Plan and, in accordance with Listing Rule
8.2.5R, constitutes a further related party transaction (together with the
Initial Related Party Transactions, the “ Related Party
Transactions ”).
Following amendments to the Lock-Up Agreement on 25 September 2025, the
Consent Fee is no longer payable.
In respect of the Related Party Transactions, at the time of entry into those
transactions, the Board considered the Related Party Transactions to be fair
and reasonable as far as the Company’s shareholders are concerned and the
Directors had been so advised by the Sponsor.
The Chairman has a personal interest in the Resolutions (both directly and
through JOSIVAR Sarl, an entity that is wholly-owned by the Chairman) as a
Backstop Shareholder, a Noteholder and as a potential recipient of Work Fee
Warrants and the Incentivisation Warrants. In accordance with the UK Listing
Rules, the Chairman has not participated in the Board’s decision-making or
voted on the relevant board resolutions in relation to the Transactions and
has made no recommendation.
Employee Share Plans
The number of Ordinary Shares subject to awards or options outstanding under
the Employee Share Plans and the exercise price (if any) may be adjusted, in
accordance with the rules of the relevant Employee Share Plans, to take into
account the issue of the Rights Issue Shares pursuant to the Rights Issue.
Holders of awards or options under the Employee Share Plans will be contacted
separately and in due course with further information on how their awards and
options may be affected by the Rights Issue.
Special General Meeting
The Notice of Special General Meeting, which is to be held the offices of
Herbert Smith Freehills Kramer LLP, Exchange House, Primrose Street, London
EC2A 2EG, United Kingdom on 6 November 2025 at 8:30 a.m. (London time), will
be set out in Part XVII ( Notice of Special General
Meeting ) of the Prospectus.
The Special General Meeting is being held for the purpose of considering and,
if thought fit, passing the Resolutions. The Resolutions will be proposed as
either ordinary or special resolutions, as set out below, and will be passed
if approved by the requisite majority of votes cast, either in person or by
proxy. A summary and explanation of the Resolutions is set out below, but
please note that this does not contain the full text of the Resolutions and
Shareholders should read this section in conjunction with the Resolutions in
the Notice of Special General Meeting that will be set out in Part XVII (
Notice of Special General Meeting ) of the
Prospectus.
Rights Issue
1. Resolution 1 (ordinary resolution)
: to allot 114,236,344 new Ordinary Shares in
connection with the Rights Issue:
1. Resolution 2 (special resolution)
: to disapply pre-emption rights in respect of the issue of Ordinary Shares
pursuant to the Rights Issue;
Backstop Fee
1. Resolution 3 (ordinary resolution)
: to allot 11,423,634 new Ordinary Shares in satisfaction of the Backstop
Fee due to the Backstop Shareholders;
1. Resolution 4 (special resolution)
: to disapply pre-emption rights in respect of the issue of Ordinary Shares
in satisfaction of the Backstop Fee;
PICE
1. Resolution 5 (ordinary resolution)
: to allot up to 41,000,000 new Ordinary Shares pursuant to the PICE
Mechanism;
1. Resolution 6 (special resolution)
: to disapply pre-emption rights in respect of any issue of Ordinary Shares
under the PICE Mechanism;
Work Fee Warrants
1. Resolution 7 (ordinary resolution)
: to allot 48 million Work Fee Warrants (being rights to subscribe for new
Ordinary Shares) issued to the Working Group of Noteholders;
1. Resolution 8 (special resolution)
: to disapply pre-emption rights in respect of the issue of the Work Fee
Warrants;
Incentivisation Plan and Incentivisation Warrants
1. Resolution 9 (ordinary resolution)
: to allot up to 16 million Incentivisation Warrants (being rights to
subscribe for new Ordinary Shares) pursuant to the proposed Incentivisation
Plan arrangements and issued to management, the Chairman and other senior
managers of the Company;
1. Resolution 10 (ordinary resolution)
: to approve the rules of the Incentivisation Plan in the form produced at
the Special General Meeting and initialled by the Chairman of the Special
General Meeting for the purposes of identification;
1. Resolution 11 (ordinary resolution)
: to approve a revised Remuneration Policy in the form produced at the
Special General Meeting and initialled by the Chairman of the Special General
Meeting for the purposes of identification to take effect immediately
following the Special General Meeting.
Pursuant to Resolution 5, Shareholders are being asked to approve the
allotment of up to 41,000,000 new Ordinary Shares pursuant to the PICE
Mechanism, which is expected to be a sufficient number of new Ordinary Shares
to allow the Company to exercise the PICE Mechanism for Year 1 (FY2026) only
(allowing for potential exchange rate variations). As the number of new
Ordinary Shares to be allotted pursuant to the PICE Mechanism in Year 2
(FY2027) and Year 3 (FY2028) onwards (to the extent that the Company chooses
to exercise the PICE Mechanism in any of these periods) is calculated using a
volume weighted average price (“ VWAP
”) of the Ordinary Shares at the time of calculation, and is dependent on
the US$ to GBP exchange rate at such time, the relevant number of new Ordinary
Shares cannot be determined at the date of this announcement. If the Company
does want to exercise the PICE Mechanism in FY2027 or beyond, it will seek
separate approvals for allotment of new Ordinary Shares, at future shareholder
meetings of the Company, as required. At such time the Company will be able to
provide to shareholders a reasonable estimate of the number of new Ordinary
Shares which will be required to be issued pursuant to the PICE Mechanism.
Resolutions 1, 3, 5, 7, 9, 10 and 11 will require more than 50% of the votes
cast by Shareholders eligible to vote in respect of it, whether in person or
by proxy, to be voted in favour to be passed at the Special General Meeting.
Resolutions 2, 4, 6 and 8 will require at least 75% of the votes cast by
Shareholders eligible to vote in respect of it, whether in person or by proxy,
to be voted in favour to be passed at the Special General Meeting.
Resolutions 1 to 8 are each inter-conditional on one another. Resolutions 9 to
11 are conditional on the passing of Resolutions 1 to 8.
If Resolutions 1 to 8 are not approved at the Special General Meeting, the
Company will be unable to complete the Rights Issue and, by extension, the
Refinancing.
Working capital statement
The Company is of the opinion that, as at the date of this announcement, the
Group does not have sufficient working capital for its present requirements,
that is, for at least the next 12 months from the date of this announcement.
Background to the Rights Issue and the Refinancing
The diamond industry is facing unprecedented challenges, impacted by a
difficult macroeconomic environment, the prolonged slowdown in China, which
has been a major consuming country, the G7 ban on Russian diamond imports and
an increase in sales of lower cost lab-grown diamonds. In 2024, rough diamond
prices also experienced significant pressure due to factors including high
pipeline inventories, weaker demand from key markets, competition from
lab-grown diamonds and an unstable geopolitical landscape. Since the
post-COVID-19 high of diamond prices in FY 2022, the average like-for-like
diamond price has decreased by 37% across the industry in FY 2025.
The Company has significant outstanding liabilities, with approximately US$99
million outstanding under the Group’s fully drawn Senior Secured Bank Debt,
and approximately US$228 million outstanding under the
Notes. Pursuant to the Lock-Up Agreement, the Notes Waiver and the Senior
Secured Bank Debt Waiver Letter, the Company has received waivers and
restrictions on enforcement from the Senior Secured Bank Debt Lender and the
Noteholders in relation to certain breaches of the terms of the Senior Secured
Bank Debt and the Notes, respectively.
As set out further below, completion of the Rights Issue and the Refinancing
are conditional on the passing of the Refinancing Resolutions at the Special
General Meeting. Therefore, if the Refinancing Resolutions are not passed, the
Rights Issue and the Refinancing will not complete.
In addition, the Refinancing is conditional on receipt of the SARB Approval.
The final application for the SARB Approval was submitted to the SARB by Absa
on the Company's behalf on 15 October 2025 and is currently expected to be
received within six to eight weeks from submission to the SARB. SARB approval
is not required for the Rights Issue and Admission of the Rights Issue Shares
will proceed on the current timetable. To the extent that the SARB Approval is
not obtained ahead of the expected date of Completion, the date of Completion
will be delayed and the new date of Completion will be notified to the FCA,
the London Stock Exchange and through the Regulatory Information Service. If
the SARB Approval is not obtained by 31 December 2025 then the Company would
be required to seek additional waivers for the delay of the SARB Approval from
the Senior Secured Bank Debt Lender and the Lock-Up Majority Noteholders in
order for the Refinancing to complete. Until the SARB Approval is obtained,
the Refinancing will not complete. The Company does not consider that there is
a material risk that the SARB Approval will not be obtained.
If the Refinancing Resolutions are not passed, the Rights Issue does not
otherwise complete, or other conditions to the Refinancing are not met
(including if the SARB Approval is not obtained), the Lock-Up Majority
Noteholders will be able to terminate the Lock-Up Agreement. If the Lock-Up
Majority Noteholders exercise such right, the Senior Secured Bank Debt Waiver
Letter will also then terminate and cease to apply, such that the Company will
cease to benefit from the waivers and restrictions on enforcement in relation
to certain breaches of the terms of the Senior Secured Bank Debt and the
Notes. At such time, the Senior Secured Bank Debt Lender would be able to
accelerate payment under the Senior Secured Bank Debt and the Noteholders
would be able to accelerate payment under the Notes, subject to the terms of
the Intercreditor Agreement. The Board believes that the Company’s operating
cash position is such that, absent the completion of the Rights Issue and the
Refinancing, the Group is highly unlikely to have sufficient funds to repay or
refinance its Senior Secured Bank Debt and/or the Notes if the Senior Secured
Bank Debt Lender and/or the Noteholders accelerate payment under the terms of
the Senior Secured Bank Debt or the Notes, respectively, with an anticipated
shortfall of approximately US$327 million of the aggregate approximately
US$327 million outstanding under the Senior Secured Bank Debt
and the Notes. Without the support of the Lock-Up Majority Noteholders not to
terminate the Lock-Up Agreement and the Senior Secured Bank Debt Lender and
the Noteholders not to enforce their debt (all of which is outside the control
of the Company), the Board believes that it is highly likely that the Company
would have no option but to file for insolvency in the relevant
jurisdiction(s). This could be as early as shortly following the Special
General Meeting in November 2025, if the Refinancing Resolutions do not pass
at the Special General Meeting and the Lock-Up Majority Noteholders exercise
their right to terminate the Lock-Up Agreement following which the Senior
Secured Bank Debt Lender and/or the Noteholders decide to accelerate their
debt.
In addition, in the event that the Lock-Up Majority Noteholders do not elect
to terminate the Lock-Up Agreement and/or both the Senior Secured Bank Debt
Lender and the Noteholders do not enforce their debt, the Company’s
outstanding liabilities under the Senior Secured Bank Debt and the Notes are
due to mature in January 2026 and March 2026, respectively. The Board believes
that the Group’s operating cash position is such that, unless the Rights
Issue and the Refinancing are completed, the Group is highly unlikely to have
sufficient funds to repay or refinance its Senior Secured Bank Debt due in
January 2026, with in an anticipated shortfall of approximately US$99 million
of the approximately US$99 million outstanding under the Senior Secured Bank
Debt. In addition, the Notes contain cross-default provisions and, as such,
would also become due and payable in January 2026 if the Group defaults on the
repayment or refinancing of the Senior Secured Bank Debt due in January 2026,
with an anticipated shortfall of approximately US$327 million of the aggregate
approximately US$327 million outstanding under the Senior Secured Bank Debt
and the Notes. As a result, even if both the Senior Secured Bank Debt Lender
and the Noteholders decide not to accelerate their debt and not to enforce
their security in November 2025 in the event that the Lock-Up Majority
Noteholders terminate the Lock-Up Agreement, absent support of the Senior
Secured Bank Debt Lender and the Noteholders not to accelerate their debt and
not to enforce their security in January 2026 (which is outside the control of
the Company) when both the Senior Secured Bank Debt and the Notes would become
due and payable, the Board believes that it is highly likely that the Company
would have no option but to file for insolvency in the relevant
jurisdiction(s) in January 2026, upon the maturity of the Senior Secured Bank
Debt.
Extending the maturity of the Senior Secured Bank Debt and the Notes along
with the net proceeds of the Rights Issue is also critical for the Group to
continue with the mine life extension capital projects. If the Rights Issue,
and therefore, the Refinancing, were to be unsuccessful, the Group would not
be able to proceed with the mine life extension capital projects at both the
Cullinan Mine and Finsch. This would likely result in both the mines not
having sufficient ore to maintain production as per guidance over the next 12
to 18 months.
Rights Issue and Refinancing proposals
Accordingly, over the past 18 months, in light of the challenges created by
the significant volatility in diamond prices and the upcoming maturity of the
Senior Secured Bank Debt and the Notes, the Company has undertaken a number of
measures, including an internal restructuring programme aimed at repositioning
itself for long-term sustainability and improved operational efficiency.
Following this operational restructuring, the Company has engaged extensively
with its key financial stakeholders to address the upcoming maturities of the
Senior Secured Bank Debt and the Notes. Given the importance of ensuring a
stable capital structure to support the long-term business plan and mine life
extension capital projects, the Board determined that a comprehensive
refinancing would be necessary to address these maturities in an orderly
manner and to underpin the Group’s future strategy.
Following extensive negotiations, on 8 August 2025 the Company announced it
had reached agreement with key stakeholders, including the Senior Secured Bank
Debt Lender, the Working Group, and certain existing shareholders, on a
holistic refinancing solution. The key elements of this refinancing solution
are as follows:
* the Debt Refinancing to put in place the Amended Senior Secured
Bank Debt which, when it comes into effect, will extend the maturity date of
the Senior Secured Bank Debt to December 2029, together with certain
amendments to the terms of this facility as set out in paragraph
Debt Refinancing above;
* the Notes Refinancing to put in place the Amended Notes which,
when it comes into effect, includes an extension of the maturity date of the
Notes to March 2030, together with amended interest payment provisions that
provide the Company with flexibility to pay interest in cash or in Ordinary
Shares through the PICE Mechanism at its discretion, as set out further in
paragraph Notes Refinancing
above; and
* the Rights Issue of approximately £18.8 million (equivalent to
approximately US$25.1 million) as set out further in paragraph
Rights Issue above.
The Directors believe that this refinancing solution is currently the only
viable plan that is capable of implementation in the time frame required to
meet the Group’s near-term maturities of its Senior Secured Bank Debt and
the Notes in January 2026 and March 2026, respectively.
In the event that, and conditional upon, the Rights Issue and the Refinancing
completing, the Company is of the opinion that, taking into account the
receipt of the net proceeds of the Rights Issue and the Amended Senior Secured
Bank Debt and the Amended Notes coming into effect, the Group will have
sufficient working capital for its present requirements, that is, for at least
the next 12 months following the date of this announcement.
The Notes Refinancing and the Debt Refinancing are each conditional on (among
other things) the passing of the Refinancing Resolutions at the Special
General Meeting and completion of the Rights Issue.
The Company has received irrevocable undertakings to vote (or to procure the
vote) in favour of the Resolutions at the Special General Meeting from
Shareholders who hold, in aggregate, approximately 74.2% of the Company’s
total voting rights. In addition, pursuant to the Backstop Agreement, the
Rights Issue is fully underwritten and committed by the Backstop Shareholders.
In connection with the Debt Refinancing, the Company has also entered into a
commitment letter and binding term sheet with the Senior Secured Bank Debt
Lender pursuant to which the Senior Secured Bank Debt Lender has, subject to
the conditions therein, committed to implementing the Debt Refinancing.
The Notes Refinancing will be implemented by way of a voluntary consent
solicitation process. On 17 October 2025, the Notes Issuer launched the
Consent Solicitation requesting (i) approval of the terms of an amended and
restated indenture, on the basis of conditions set forth in a third
supplemental indenture; (ii) that the Notes Trustee execute the Implementation
Deed; and (iii) that the Notes Trustee execute the Amended Intercreditor
Agreement; and (iv) that the Notes Trustee execute the Deed of Release.
As a result of the agreement by Noteholders representing over 99% of the
outstanding principal amount of the Notes to support the Consent Solicitation
under the Lock-Up Agreement, the Company expects that the requisite consents
to effect the amendments to the Notes will be received promptly after the
launch of the Consent Solicitation, shortly following which the Notes Trustee
will be directed to execute the Implementation Deed.
The Implementation Deed sets out (among other things) the steps required to be
taken to complete the Refinancing (including the amendment of the Notes and
the extension of the maturity date in respect of the Senior Secured Bank
Debt). As at the date of this announcement, the Implementation Deed has been
substantially agreed by all of the relevant parties to it and the
Implementation Deed is expected to be executed after the requisite consents
have been provided under the Consent Solicitation (and before the Special
General Meeting).
Once the Implementation Deed is executed and the Implementation Documents are
in agreed form between the relevant parties, the Notes Trustee and the Senior
Secured Bank Debt Lender and other relevant parties in respect of the Senior
Secured Bank Debt will (in accordance with the terms of the Implementation
Deed) also provide their undated and unreleased signatures to those
Implementation Documents to the Company’s Counsel so that the relevant
signatures can (subject to the satisfaction of the relevant conditions) be
released prior to Completion pursuant to the terms of the Implementation Deed.
As at the date of this announcement, drafts of each of the key Implementation
Documents are in an advanced form and the Company does not anticipate that
there will be any issues with finalising any of the Implementation Documents
prior to the date of the Special General Meeting.
As at the date of this announcement, the Company anticipates that, by the date
of the Special General Meeting, most of the requirements for completing the
Refinancing will have been completed and the remaining steps for completion of
the Refinancing—once the Refinancing Resolutions have been passed and the
SARB Approval is obtained (which the Company does not consider there to be a
material risk of not being obtained)—will be predominantly mechanical and
mostly within the control of the Company and its advisers.
In light of this, the agreement of Noteholders representing over 99% of the
outstanding principal amount of the Notes to support the Consent Solicitation
under the Lock-Up Agreement and that the Company has received irrevocable
undertakings to vote (or to procure the vote) in favour of the Resolutions at
the Special General Meeting from Shareholders who hold, in aggregate,
approximately 74.2% of the Company’s total voting
rights, the Directors expect that the Rights Issue, the Notes Refinancing and
the Debt Refinancing will complete and the Amended Senior Secured Bank Debt
and the Amended Notes will come into effect on the date on or around which the
Company receives the net proceeds from the Rights Issue.
As a result, the risk of the Refinancing not completing in the event of the
passing of the Refinancing Resolutions and
completion of the
Rights Issue is
very low due
to the remaining
steps being predominantly mechanical
and mostly in the control of the Company and its advisers other than the SARB
Approval (which the Company does not consider there to be a material risk of
not being obtained). There, however, remains a residual risk that the Rights
Issue Shares are issued without the Refinancing completing, as a few elements
of the Refinancing remain outside the control of the Company, including that
the Noteholders could default on their obligation under the Lock-Up Agreement
to deliver consents pursuant to the Consent Solicitation process (and
therefore the Implementation Deed would not be executed), a Backstop
Shareholder defaults on its obligations under the Backstop Agreement such that
the Company does not receive the full amounts in respect of the Rights Issue
or the Lock-Up Agreement and/or the Implementation Deed terminate due to the
occurrence of a termination event under the Lock-Up Agreement which is outside
of the Company’s control (such as a court making an order preventing the
implementation of the Refinancing or failure to obtain the SARB Approval
(which the Company does not consider there to be a material risk of not being
obtained)).
Potential mitigation actions if the Rights Issue and the Refinancing do not
complete
The Rights Issue and the Refinancing are conditional on the passing of the
Refinancing Resolutions at the Special General Meeting. Therefore, if the
Refinancing Resolutions are not passed, the Rights Issue and the Refinancing
will not complete.
Further, the Refinancing is conditional on the Company receiving gross
proceeds of approximately £18.8 million (equivalent to approximately US$25.1
million) pursuant to the Rights Issue. Therefore, if the Backstop Shareholders
default on their obligations under the Backstop Agreement to underwrite the
Rights Issue, such that the Company does not receive gross proceeds of
approximately £18.8 million (equivalent to approximately US$25.1 million),
the Refinancing will not complete. In addition, the Refinancing is conditional
on receipt of the SARB Approval. The final application for the SARB Approval
was submitted to the SARB by Absa on the Company's behalf on 15 October 2025
and is currently expected to be received within six to eight weeks from
submission to the SARB. SARB approval is not required for the Rights Issue and
Admission of the Rights Issue Shares will proceed on the current timetable. To
the extent that the SARB Approval is not obtained ahead of the expected date
of Completion, the date of Completion will be delayed and the new date of
Completion will be notified to the FCA, the London Stock Exchange and through
the Regulatory Information Service. If the SARB Approval is not obtained by 31
December 2025 then the Company would be required to seek additional waivers
for the delay of the SARB Approval from the Senior Secured Bank Debt Lender
and the Lock-Up Majority Noteholders in order for the Refinancing to complete.
Until the SARB Approval is obtained, the Refinancing will not complete. The
Company does not consider that there is a material risk that the SARB Approval
will not be obtained.
Additionally, as set out above, if the Refinancing Resolutions are not passed,
the Lock-Up Majority Noteholders will be able to terminate the Lock-Up
Agreement and at such time the Senior Secured Bank Debt Waiver Letter will
also terminate and cease to apply, such that the Company will also cease to
benefit from such waivers and restrictions on enforcement in relation to
certain breaches of the terms of the Senior Secured Bank Debt and the Notes.
At such time, the Senior Secured Bank Debt Lender would be able to accelerate
payment under the terms of the Senior Secured Bank Debt and the Noteholders
would be able to accelerate payment under the Notes.
In relation to any of the above circumstances, the Directors have considered
whether there are any other actions that could be taken to preserve the
viability of the Group and protect stakeholder value. These actions include:
* The Company could seek to renegotiate terms and/or enter new
negotiations to raise debt or equity capital from new or existing investors.
However, absent the comprehensive support of Noteholders already obtained
under the Lock-Up Agreement and the Senior Secured Bank Debt Lender, the Board
considers this to be highly unlikely to succeed on acceptable terms or at all
in the current circumstances, given that the Company has engaged extensively
with its financial stakeholders to agree the proposals set out in this
announcement.
* The Company might seek to implement an alternative form of
restructuring, such as a UK-court approved restructuring plan under Part 26A
of the Companies Act 2006, a scheme of arrangement, or a consensual
debt-for-equity swap, with a view to reducing or equitising a portion of its
indebtedness. However, implementation of any such alternative would require
renegotiation with the Senior Secured Bank Debt Lender, the Noteholders and
other stakeholders, together with the preparation of detailed financial and
legal documentation, independent valuations, and (in the case of a
court-supervised process) the securing of requisite court approvals, all of
which would take a number of months to agree. The Board has not initiated any
preparatory work on these alternatives given the support already obtained for
the Rights Issue and the Refinancing.
* The Company could consider selling one of its assets in order to
generate cash and reduce liabilities. However, there is limited near-term
visibility on the availability of buyers or acceptable valuations for any such
disposals, and the time required to identify a potential buyer, negotiate and
document any sale terms and complete any such transaction (taking into account
also any regulatory approvals required for such transaction) would likely
exceed the period during which the Company is expected to have adequate
liquidity. In addition, the Group only has two key assets, the Cullinan Mine
and Finsch, and the Company believes a sale of either of these assets would
significantly impact the Group’s revenue going forward and its ability to
remain a viable concern. The Directors are uncertain whether a sale of any one
of the two assets alone would be sufficient to settle the outstanding debt
that is maturing in January 2026 and March 2026, respectively.
In respect of each of the proposed actions above, the Directors do not believe
there is any realistic prospect of the Company being able to complete the
required steps before the Senior Secured Bank Debt matures in January 2026,
unless both the Senior Secured Bank Debt Lender and the Noteholders agreed to
a standstill and refrained from enforcement action (either by extending the
waivers and restrictions on enforcement already in place or putting new and
corresponding arrangements in place) during that period, which is outside the
Company’s control.
The Directors have concluded that the available alternatives would be highly
limited and highly unlikely to deliver a better outcome for Shareholders,
Noteholders or other creditors than the Rights Issue and the Refinancing, and
may deliver no viable alternative in the circumstances given the impending
debt maturity in January 2026 and that the waivers and restrictions on
enforcement in relation to certain breaches of the terms of
the Notes and the Senior Secured Bank Debt would fall away in the event
that the Refinancing Resolutions are not passed or the Rights Issue does not
otherwise complete and the Lock-Up Majority Noteholders exercise their right
to terminate the Lock-Up Agreement. In such circumstances, the Senior Secured
Bank Debt Lender and/or the Noteholders would be able to accelerate payment of
their debt, which could be as soon as shortly following the Special General
Meeting in November 2025, if the Refinancing Resolutions do not pass at the
Special General Meeting.
Implications if the Rights Issue and the Refinancing do not successfully
complete
If the Rights Issue and the Refinancing do not successfully complete for any
reason, including if the Refinancing Resolutions are not passed at the Special
General Meeting or other conditions to the Refinancing are not met (including
if the SARB Approval is not obtained), or if the Shareholders do not
participate in the Rights Issue (and the Backstop Shareholders default under
the Backstop Agreement) such that the Company is not able to raise gross
proceeds of approximately £18.8 million (equivalent to approximately US$25.1
million), this would lead to a material adverse impact on the Company’s
business, financial condition and prospects, including:
* the Company’s existing financial position will remain unchanged
with liabilities of approximately US$99 million outstanding under the fully
drawn Senior Secured Bank Debt and approximately US$228 million outstanding
under the Notes due to mature in January 2026 and March 2026, respectively;
* the Group would not be able to proceed with the mine life
extension capital projects at either of the Cullinan Mine or Finsch, which
would likely result in significantly reduced revenues and both the mines not
having sufficient ore to maintain production as per guidance over the next 12
to 18 months;
* the Lock-Up Majority Noteholders will be able to terminate the
Lock-Up Agreement and at such time the Senior Secured Bank Debt Waiver Letter
will also terminate and cease to apply such that the Company will cease to
benefit from such waivers and restrictions on enforcement in relation to
certain breaches of the terms of the Notes and the Senior Secured Bank Debt,
such that the Noteholders and the Senior Secured Bank Debt Lender would be
able to accelerate payment under the terms of the Notes and the Senior Secured
Bank Debt, respectively;
* the Board believes that any alternative financing options will be
extremely limited or unavailable and therefore, in such circumstances, the
Board believes without the Rights Issue and the Refinancing, the Group is
highly unlikely to have sufficient funds to repay or refinance its Senior
Secured Bank Debt and/or the Notes and the Company would have no option but to
file for insolvency in the relevant jurisdiction(s)
which could be
as soon as
shortly following
the Special General
Meeting in November 2025, if the
Refinancing Resolutions do not pass at the Special General Meeting and the
Lock-Up Majority Noteholders exercise their right to terminate the Lock-Up
Agreement following which the Senior Secured Bank Debt Lender and/or the
Noteholders decide to accelerate their debt;
* in any event, even if the Lock-Up Majority Noteholders do not
terminate the Lock-Up Agreement and/or both the Senior Secured Bank Debt
Lender and the Noteholders do not enforce their debt (which is outside the
control of the Company), without the Rights Issue and the Refinancing, the
Board does not expect to be able to repay or refinance the liabilities under
the Senior Secured Bank Debt as it falls due in January 2026 or the Notes
which would also come due and payable in January 2026 as a result of
cross-default provisions in the Notes, and as such the Group may not be able
to continue as a going concern at that time; and
* therefore, even if both the Senior Secured Bank Debt Lender and
the Noteholders decide not to accelerate their debt and enforce their security
in November 2025 (in the event that the Refinancing Resolutions do not pass at
the Special General Meeting and the Lock-Up Majority Noteholders terminate the
Lock-Up Agreement), absent support of the Senior Secured Bank Debt Lender and
the Noteholders not to accelerate their debt and not to enforce their security
in January 2026 (which is outside the control of the Company) when both the
Senior Secured Bank Debt and the Notes would become due and payable, the Board
believes that it is highly likely that the Company would have no option but to
file for insolvency in the relevant jurisdiction(s) in January 2026, upon the
maturity of the Senior Secured Bank Debt.
Summary
The proposals set out in this announcement are of critical importance to the
future of the Company. The Board believes that the Rights Issue and the
Refinancing represent the most viable and sustainable path to strengthen the
Group’s financial position.
If the Refinancing Resolutions are not approved by Shareholders at the Special
General Meeting, the Rights Issue and the Refinancing will not proceed. In
such circumstances, the Company believes that the Group will not have
sufficient working capital for its present requirements, that is, for at least
the next 12 months from the date of this announcement, and there would be
significant uncertainty regarding the Group’s ability to continue as a going
concern, which may have a material adverse impact on the value of
Shareholders’ investment in the Company and may cause Shareholders to lose
all or a substantial portion of their investment. The Board believes that
absent support of the Senior Secured Bank Debt Lender and the Noteholders not
to enforce their debt (which is outside the control of the Company), it is
highly likely that the Company would have no option but to file for insolvency
in the relevant jurisdiction(s) which the Senior Secured Bank Debt Lender
and/or the Noteholders decide to accelerate their debt which the Board
believes would be highly likely to result in significantly reduced recoveries
for creditors and no return for Shareholders. This could be as soon as shortly
following the Special General Meeting in November 2025, if the Refinancing
Resolutions do not pass at the Special General Meeting and the Lock-Up
Majority Noteholders decide to accelerate their debt.
Accordingly, the Board strongly believes that the approval of the Refinancing
Resolutions and the Rights Issue and the Refinancing is the best transaction
possible for the Company, Shareholders and its stakeholders and is in the best
interests of the Company and its Shareholders as a whole.
In accordance with the UK Listing Rules, the Chairman has not participated in
the Board’s decision- making or voted on the relevant board resolutions in
relation to the Transactions and has made no recommendation. Accordingly, the
Chairman cannot recommend that Shareholders vote in favour of the Resolutions
but has undertaken to vote in favour of the Resolutions in respect of his own
legal and beneficial holdings, amounting to 22,458,525
Existing Shares (representing approximately 11.6% of the Company’s
existing issued ordinary share capital as at the Latest Practicable Date) and
encourages Shareholders to vote on the Resolutions.
Definitions
Petra Diamonds Limited 2021 Perfo r mance Share Plan the share option plan adopted by the Company a t the 2021 annu a l gener a l meeting.
Admission the admission of the Rights Issue Shares and the Ba c kstop Fee Shares to listing on the ESCC C a tego r y of the O f fici a l List of the FCA and to trading on the Main Ma r ket
Backstop th e underwritin g o f th e Right s Issu e by th e Ba c ksto p Shareholde r s who have a g reed, pu r suant to the te r ms of the Ba c kstop A g reement, to underwrite the Rights Issue a t a price of 16.5 pence per Rights Issue Share
Backstop Agreement th e a g reemen t bet w ee n th e Compa ny an d th e Ba c ksto p Shareholde r s d a te d 8 A ugus t 2025 , a s amende d a n d supplemented on 29 August 2025 and 17 October 2025, pu r suant to whi c h the Ba c kstop Shareholde r s
committed to fully commit and underwrite the Rights Issue and to vote (or to procure the vote) in favour of the Resolutions to e f fect the Refinancing and the Rights Issue
Backstop Fee the fee pay a ble by the Company to ea c h Ba c kstop Shareholder for their se r vices committing to and underwriting the Rights Issue
Backstop Fee Shares the new Ordina r y Shares to be issued in connection with the Ba c kstop Fee
Backstop Shareholders Te r ris, Azv a lor Asset Man a gement SGIIC SA, JOSIVAR Sa r l, J os é Manue l V ar g a s, K ym a C a pit a l , Mecamu r S .L. , Th e Langma n 201 0 Descendant s T r ust , Viv e k Gadodi a an d Jozephus Kemp
Board the board of directo r s of the Company from time to time
Business Day ea c h day th a t is not a S a turday or a Sunday or other day on whi c h banking institutions in London, Johannesburg or New Yo r k are authorised or required by law to c lose
Cashless T a ke-up the s a le of su c h number of Nil Paid Rights as will gener a te su f ficient s a le proceeds to en a ble the direct or indirect holder thereof to t a ke up a ll of their remaining Nil Paid Rights (or entitlement s thereto
) withou t bein g require d t o pr o vid e a ny fu r ther c a pit a l
Consent Fee the fee whi c h was proposed to be pay a ble in addition a l Notes on Completion in an amount equ a l to 4% of the ag g reg a te princip a l amoun t o f Note s f o r whi c h a Noteholde r pr o vide d consent, but whi c h was
removed as pa r t of the amendments to the Lo c k-Up A g reement on 25 September 2025
Consent Solicit a tion the voluntary solicitation process by which the Notes Refinancing will be implemented
Companies Act Companies Act 1981 of Be r muda (as amended)
Company or Petra P et ra Diamond s Limited , a n ex empte d compa ny limite d by shares inco r por a ted and registered in Be r muda with registered number 23123
Company’s Counsel He r be r t Smith Freehills Kramer LLP
Completion the date of the completion of the Refinancing
Contributed Su r plus as defined in section 54 of the Companies Act
CREST the relevant system in respect of whi c h Euro c lear UK is the oper a tor (as defined in the CREST Regul a tions)
CREST Manu a l the r ules gove r ning the oper a tion of CREST, consisting of the CREST Reference Manu a l, CREST Rules, Registra r s Se r vice Standard s, Settlemen t Disciplin e R ule s, CCS S Ope r a tion s Manu a l, Daily Timet a ble, CREST A
pplic a tion Procedures and CREST Glossa r y of Te r ms promulg a ted by Euro c lear UK on 15 July 1996 (and as amended since)
Cullinan Mine or Cullinan the Cullinan diamond mine in Gauteng Province, South Africa
Debt Refinancing an extension to the m a turity d a te of the Senior Secured Bank Debt from Janua r y 2026 to December 2029, a longside ce r tain other c hanges to the te r ms of the Senior Secured Bank Debt
Deed Poll the deed d a ted 23 Mar c h 2005 in respect of the DIs
Deposita r y MUFG Co r por a te Ma r kets T r ustees (UK) Limited
DI Holders the holde r s of DIs
DI Nil Paid Rights DIs representing Nil Paid Rights
Directors the directo r s of the Company as a t the d a te of this announcement
Directors’ Remuneration Report the directors’ remuneration report within the 2025 Financial Statements
Disclosure Guidance and Transparency Rules The Disclosure Guidance and Transparency Rules of the Financial Conduct Authority made in accordance with section 73A of FSMA
EBITDA the net profit before net interest (excluding net unrealised foreign exchange gains and losses), tax, depreciation, amortisation and loss on discontinued activities.
EEA the European Economic Area first established by the agreement signed at Oporto on 2 May 1992
Employee Share Plans means the Petra Diamonds Limited 2021 Perfo r mance Share Plan
Enlarged Issued Share C a pit a l the issued share c a pit a l of the Company immedi a tely following the completion of the Rights Issue and the issue of the Rights Issue Shares and the Ba c kstop Fee Shares
ESCC C a t e go r y the equity shares (commerci a l companies) c a tego r y
Excluded Te r ritories Austr a lia, Canada, New Ze a land, J a pan, South Africa and the United St a tes, and any other jurisdiction outside the United Kingdom where the Company is advised th a t the avail a bility of the Rights Issue (and any other
transactions contempl a ted in rel a tion to it) may brea c h any a pplic a ble law or regul a tion, ea c h an “ Excluded Te r rito r y ”
Existing Shares the Ordina r y Shares in issue as a t the d a te of the Prospectus (in c luding, if the context requires, the Existing DIs)
FCA the UK Financi a l Conduct Authority acting in its c a pacity as a competent authority for the pu r poses of Pa r t VI of FSMA
Finsch or Finsch Mine the Fins c h diamond mine in the No r the r n C a pe Province, South Africa
Fo r m of Direction the fo r m of direction for completion by DI Holde r s in rel a tion to voting on the Resolutions by the Deposito r y
FSMA the Financi a l Se r vices and Ma r kets Act 2000 (as amended) of the United Kingdom
FY the Company’s financi a l year 1 July to 30 June
G7 Group of Seven, whi c h in c ludes Canada, France, Ge r many, It a ly, J a pan, the United Kingdom and the United St a tes
Group the Company and its directly and indirectly owned subsidiaries
Implement a tion Deed the agreement to be entered into by, inter alios, the Company, certain members of the Group, Absa, the Notes Trustee and the Security SPV governing the implementation of the Refinancing
Implement a tion Documents the other documents to be entered into in connection with the amendments to the Notes and the Senior Secured Bank Debt as set out in the Implement a tion Deed (with su c h documents in c ludin g (amon g othe r s ) th e
amendmen t an d rest a temen t a g reement in respect of the facility a g reement for the Senior Secure d Ban k Debt , th e amendmen t an d rest a tement a g reement in respect of the Intercreditor A g reement, the Deed of Release and the
documents in connection with the Wa r rants
Implement a tion Steps the steps required to complete the Refinancing
Incentivis a tion Plan the incentivis a tion plan for the benefit of the man a gement, the Chai r ma n an d othe r senio r man a g e r s o f th e Compa ny implemente d by th e Compa ny i n connectio n wit h th e Refinancing
Incentivis a tion Wa r rants the wa r rants to be g ranted for the benefit of the Chairman and f o r th e bene f i t o f man a g emen t an d senio r man a g e r s i n connection with the Incentivis a tion Plan
Initi a l Rel a ted Pa r ty Transactions has the meaning given to it in the paragraph Related Party Transaction of the appendix to this announcement
Intercreditor Agreement the intercreditor a g reement d a ted 4 May 2015 (as amended or amende d an d rest a te d fro m tim e t o time ) bet w ee n (amon g othe r s ) th e Compa ny an d th e Senio r Secure d Ban k Deb t Lender (as amended, rest a ted or
otherwise modified or varied from time to time and as acceded to by the Notes T r ustee on or a bout 12 A pril 2017 and as amended and rest a ted from time to time, in c luding as of 24 June 2022)
Issue Price 16.5 pence per Rights Issue Share
Investor Code a Shareholder’s 11-digit investor code
Kimberley Process a join t g ov e r nment , indust r y an d c i vi l societ y ce r ti f ic a tio n initi a t ive t o ste m th e flo w o f conflic t diamond s wherei n pa r ticipants can leg a lly trade only with other Kimbe r ley Process pa r ticipants who have
a lso met the minimum requirements of th e s c hem e, an d whi c h require s inte r n a tion a l shipment s o f roug h diamond s t o b e accompanie d by a ce r ti f ic a t e guaranteeing they are conflict-free
Ko f fiefontein the Ko f fiefontein diamond mine
Kyma C a pit a l Kyma C a pit a l Limited
L a test Practic ab le D a te 16 October 2025
li a bility any debt, li a bility or oblig a tion wh a tsoever, whether it is present, future, prospective or contingent, whether or not its amount is fixed or undete r mined, whether or not it involves the payment of money or the perfo r mance of an act
or oblig a tion, and whether it arises a t common law, in equity or by st a tute, in England and W a le s o r i n a ny othe r jurisdiction , o r i n a ny othe r manne r wh a tsoever, but su c h expression does not in c lude any li a
bility whi c h is ba r red by st a tute or is otherwise unenforce a ble or arises under a contract whi c h is void or, being void a ble, has bee n dul y av oide d an d “ Li a bilities ” sh a l l b e const r ue d accordingly
LGD l a bor a to r y- g rown gem diamond
Lock-Up Agreement the lock-up agreement dated 8 August 2025 in connection with the Notes Refinancing entered into or acceded to by Noteholders representing in aggregate over 99% of the Notes (by value), as amended on 25 September 2025
Lock-Up Majority Noteholders Noteholde r s representin g ov e r 50 % o f the outstanding aggregate principal amount of the Notes subject to the Lock-Up Agreement
London Stock Exchange London Sto c k Ex c hange plc
Main Market New DIs the London Sto c k Ex c hange’s main ma r ket for listed securities the DIs to be issued by the Deposito r y in respect of the Rights Issue Shares received by the Deposito r y for and on beh a lf of Qu a lifying DI Holde r s pu r suant to the
Rights Issue
New Shares the Rights Issue Shares, the Ba c kstop Fee Shares, any PICE Shares and any new Ordina r y Shares issued upon the exercise of the Wa r rants
Nil Paid Rights the rights to acquire Rights Issue Shares, nil paid
Noteholders the holders, beneficial owners or owner of the ultimate economic interest of the Notes
Notes the approximately US$228 million 9.75% Senior Secured Second Lien Notes due 2026 of the Company’s wholly owned subsidia r y, the Notes Issuer
Notes Issuer Petra Diamonds US$Treasu r y Plc, a wholly owned subsidia r y of the Company
Notes Refinancing an extension to the m a turity d a te of the Notes from Mar c h 2026 to Mar c h 2030 a longside concu r rent amendments to the Notes
Notes Trustee Deuts c h e Ban k T r us t Compa ny America s i n it s c a pacit y a s t r ustee under the Notes Indenture
Notes Waiver a w a iv e r a g ree d bet w ee n th e Compa ny an d th e Noteholde r s pa r ty t o th e Lo c k-U p A g reemen t o n 29 September 2025 in rel a tion to ce r tain potenti a l brea c hes of the te r ms of Notes
Notice of Speci a l Gener a l Meeting the notice of Speci a l Gener a l Meeting to be set out in the Prospectus
O f fici a l List of the FCA the O f fici a l List of the FCA pu r suant to Pa r t VI of the FSMA
Ordina r y Shares the ordina r y shares of 0.05 pence ea c h in the c a pit a l of the Company
Overseas Shareholders Shareholde r s with registered addresses outside of the United Kingdom or who are citizens or residents of countries outside the United Kingdom
PICE payment-in-cash-or-equity
PICE Mechanism as pa r t of the Notes Refinancing, payment of the interest on the Amended Notes in cash or the issuance of the PICE Shares o r a combin a tio n o f cas h an d PIC E Share s, a t th e Note s Issuer’s discretion
PICE Shares addition a l new Ordina r y Shares issued to pay interest on the amended Notes as pa r t of the PICE Me c hanism whi c h is being implemented pu r suant to the Notes Financing
Profit from Mining Activities the revenue less Adjusted Mining and Processing Costs plus other direct income
Prospectus the document that is expected to be published by the Company on the date of this announcement comprising (i) a circular prepared in accordance with the UKLRs; and (ii) a simplified prospectus relating to the Rights Issue and Backstop Fee Shares prepared in
accordance with the Prospectus Regulation Rules
Prospectus R e gul a tion Rules the Prospectus Regul a tion Rules published by the FCA under section 73A of FSMA
Provision a l Allotment Letter the renounce a ble provision a l a llotment letter expected to be sent to Qu a lifying Non-CREST Shareholde r s in respect of the Nil Paid Rights to be provision a lly a llotted to them pu r suant to the Rights Issue
Qu a lifying DI Holders DI Holde r s of Existing DIs on the DI Register a t the Record D a te
Qualifying Non-CREST Shareholders holders of Ordinary Shares in certificated form on the Share Register at the Record Date
Qu a lifying Shareholders Qualifying Non-CREST Shareholders and Qualifying DI Holders at the Record Date
Record D a te 4 November 2025
Refinancing t o gether, the Notes Refinancing and the Debt Refinancing
Refinancing Resolutions resolution s 1 t o 8 t o b e propose d a t th e Speci a l Gene r a l Meeting as detailed in the appendix of this announcement
R e gistrar MUFG Co r por a te Ma r kets (Je r sey) Limited
Rel a ted Pa r ties t o gether, JOSIVAR Sa r l, José Manuel Vargas in his pe r son a l c a pacity and Te r ris
Rel a ted Pa r ty Transactions has the meaning given to it in the par a g r a ph Related Party Transaction of the appendix to this announcement
Resolutions the resolutions to be proposed a t the Speci a l Gener a l Meeting as detailed in the appendix of this announcement
Restricted DI Holder DI Holde r s with registered addresses in any Ex c luded Te r rito r y or who are loc a ted or resident in any Ex c luded Te r rito r y
Restricted Shareholder Qu a lifyin g Shareholde r s wit h registere d addresse s i n a ny E x c lude d T e r rito r y o r wh o ar e loc a te d o r residen t i n a ny Ex c luded Te r rito r y
Rights Issue a rights issue of a pproxim a tely £18.8 million (equivalent to approximately US$25.1 million) a t an issue price of 16.5 pence per Rights Issue Share, fully underwritten and committed by ce r tain existing Shareholde r s, on the te r ms
and subject to the conditions set out in the Prospectus
Rights Issue Shares the Ordina r y Shares to be issued by the Company pu r suant to the Rights Issue
SARB the South African Rese r ve Bank
SARB Approv a l receip t o f ex c han ge contro l a ppr o v a l fro m th e Financi a l Su r veillance Depa r tment of the South African Rese r ve Bank
Securities Nil Paid Rights, DI Nil Paid Rights, Rights Issue Shares and/or New DIs
Senior Secured Bank Debt the Group’s senior secured bank debt facilities
Senior Secured Bank Debt Lender Absa Bank Limited (acting through its Corporate and Investment Banking division)
Senior Secured Bank Debt Waiver Letter a waiver letter a g reed between the Company and the Senior Secure d Ban k Deb t Lende r o n an d o n 8 A ugus t 202 5 an d amended on 12 September 2025
Shareholders holde r s of Ordina r y Shares from time to time (in c luding, for the avoidance of doubt and unless the context otherwise indic a tes, DI Holde r s)
South Africa the Republic of South Africa
Speci a l De a ling Se r vice th e de a lin g se r vic e bein g mad e a vail a bl e by th e R ece i vin g A g en t t o Qu a lifyin g Non-CRES T Shareholde r s wh o ar e individu a ls with a registered address in the United Kingdom or any other jurisdiction
within the EEA who wish to sell a ll of their Nil Paid Rights or to e f fect a Cashless T a ke-up
Speci a l De a ling Se r vice Te r ms and Conditions the te r ms and conditions of the Speci a l De a ling Se r vice
Speci a l Gener a l Meeting th e Speci a l Gene r a l Meetin g o f th e Compa ny t o b e hel d pu r suan t t o th e Notic e o f Speci a l Gene r a l Meetin g i n connection with the Transactions a t the o f fices of He r be r t Smith F reehill s K r ame r LL P, E
x c han ge Hous e, Primros e Street , London EC2A 2EG, United Kingdom on 6 November 2025 a t 8:30 a.m.
Sponsor or Peel Hunt Peel Hunt LLP
Tanzania the United Republic of Tanzania
TERP the theoretic a l ex-rights price
Te r ris the theoretic a l ex-rights price
Transactions the Rights Issue, the Refinancing and associ a ted propos a ls
UK Listing Rules or UKLR the listing r ules made by the FCA under section 74 of FSMA
UK Product Gove r nance Requirements the product gove r nance requirements of Ch a pter 3 of the FCA Handboo k Produc t Inte r v entio n an d Produc t G ov e r nanc e Source book
UK Prospectus R e gul a tion th e U K v e r sio n o f th e Prospectu s R egul a tio n (Regul a tion (EU) 2017/1129), as amended, whi c h is pa r t of UK law by vi r tue of the European Union (Withdraw a l) Act 2018 (as amended and supplemented from time to time)
unce r tific a ted or unce r tific a ted fo r m a share or other security title to whi c h is recorded in the relevant register of the share or other security conce r ned as being held in unce r tific a ted fo r m in CREST (through Deposita r y Interests) and title to whi c h may be transfe r red by
using CREST
United Kingdom or UK the United Kingdom of Gre a t Britain and No r the r n Ireland
United St a tes or US the United St a tes of America, its te r ritories and possessions, any st a te of the United St a tes of America, and the District of Columbia
US$ or $ or US dollars US dolla r s, the lawful cu r rency of the United St a tes
US Securities Act the United St a tes Securities Act of 1933, as amended
VWAP volume weighted average price
Wa r rants together, the Work Fee Warrants and the Incentivisation Warrants
Williamson or Williamson Mine Williamso n diamon d min e i n M w adui , Shi ny an ga Pr o vinc e, Tanzania
Work Fee Wa r rants the wa r rants in respect of Ordina r y Shares a t an exercise price of 20 pence per Ordina r y Share to be g ranted in connection with the Refinancing in order to incentivise eng a gement and ensure suppo r t from key st a keholde r s
Working Group the wo r king g roup of holde r s of the Notes
£ or pounds or pounds sterling or sterling or GBP pounds ste r ling, the lawful cu r rency of the United Kingdom
Glossary of Technical Terms
% Per cent
b lock caving a n under g roun d har d ro c k minin g metho d th a t i nv ol v e s unde r mining an ore body, a llowing it to pr o g ressively coll a pse under its own weight. In blo c k caving, a large section of ro c k is undercut , cre a tin g a n a r ti f ici a l c av e r n th a t f ill s wit h it s ow n r ubble as it coll a pses
Carat or ct a measure of weight used for diamonds, equivalent to 0.2 grams
Mcts Million carats
Mtpa million tonnes per annum
shaft an under g round ve r tic a l or in c lined excav a tion, gener a lly used for access, ventil a tion and ore transpo r t
tailings material left over after processing ore
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