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Investing.com -- Petra Diamonds Ltd., a UK-based mining company, has reported the resignation of its Chief Executive Officer Richard Duffy, a drop in earnings, and a breach of its lending covenants.
The company's shares fell by as much as 19% to a record low following the announcement.
Duffy, who has been the company's CEO since 2019, stepped down from his role with immediate effect. Vivek Gadodia and Juan Kemp have been appointed as joint interim CEOs following Duffy's departure.
Petra Diamonds also reported a significant 60% drop in earnings for the six months ending December 31.
The company, which owns two diamond mines in South Africa, posted adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $15 million for the period, as stated in an interim results announcement.
The mining company has been facing challenges due to weak diamond prices. Petra Diamonds also revealed that lower EBITDA in 2024 led to a breach of leverage and interest coverage covenants under its revolving credit facility.
However, Absa Bank, the lender, has waived both requirements, and Petra Diamonds maintains sufficient liquidity headroom.
Peter Mallin-Jones, a research analyst at Peel Hunt, commented on the situation, stating, "Getting the waiver was critical and shows that lenders are willing to be supportive and find a solution."
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