(diamonds.net) - The current plight of Petra Diamonds is a frustrating example of the impact Covid-19 has had on the diamond industry, highlighting the lack of readiness for such a downturn. As an important mid-tier diamond miner, the company has annual production of around 3.5 million to 3.8 million carats, but is burdened by high debt from its efforts to extend the life of its operations and maintain a promise of long-term growth. The pandemic has caused rough sales to plummet and some mining operations to shut down temporarily. With zero revenue coming in, Petra’s $650 million bond has left it vulnerable. It missed an interest payment that was due in May, but managed to negotiate an extension to that payment and is now deliberating its strategy moving forward. Restructuring its debt would give the company leeway to continue as previously planned, and should lenders back the move, it would probably be with more stringent credit terms in place. But the miner is also exploring the possibility of a buyout, considering offers for parts or the whole of its business.
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