Petra Diamonds Reaches Lock-up Agreement with Lenders

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Petra Diamonds Limited has announced on November 17, 2020 that it has executed a lock-up agreement with an ad-hoc group of holders of the US$650 million 7.25% senior secured second lien notes issued by the Group, the providers of the Group’s first lien bank debt facilities (the South African Lender Group) and its black economic empowerment partners (the BEE Partners). This Lock-Up Agreement formalises the agreement reached in principle regarding a long-term solution for the recapitalisation of the Group (the Restructuring). The execution of the Lock-Up Agreement "marks a positive step forward in the implementation of the Restructuring," the Company states. Pursuant to the terms of the Lock-Up Agreement, the parties have undertaken to take all actions reasonably necessary in order to implement the Restructuring and to not delay or prevent the implementation of the Restructuring.

As announced by the Company on 20 October 2020, the key features of the Restructuring are as follows: 1. partial reinstatement of the Notes debt and the contribution by holders of the existing Notes of US$30.0 million in new money, each to take the form of new senior secured second lien notes (New Notes). It is expected that the New Notes will amount to approximately US$337.0 million (including the new money and fees paid as part of the transaction in New Notes); 2. conversion of the remainder of the Notes debt into equity, which will result in the holders of the Notes (the Noteholders) holding 91%of the enlarged share capital of PDL; 3. restructuring of the first lien facilities provided by the South African Lender Group; and 4. new governance arrangements and cashflow controls.

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