Petra Diamonds is undergoing significant changes following the immediate resignation of CEO Richard Duffy. The company reported a staggering 60% drop in earnings for the six months ending December 31, alongside a breach of its lending covenants. In response to Duffy’s departure, Vivek Gadodia and Juan Kemp have been appointed as joint interim CEOs.
Gadodia will oversee corporate affairs, while Kemp will handle operational management, both reporting directly to the board. Gadodia has been with Petra Diamonds since 2021 after a 15-year career at Sasol, while Kemp, has been with the company since 2009. Petra Diamonds ranks as the third-largest global producer of rough diamonds.
ALSO READ:
Petra Diamonds issues 200 retrenchment notices, NUM opposes
The announcement triggered a sharp decline in the company’s shares, which fell by 19% to a record low. Petra Diamonds, which operates two diamond mines in South Africa, posted an adjusted EBITDA of $15 million during this period, reflecting ongoing challenges due to weak diamond prices. The lower earnings in 2024 contributed to the breach of leverage and interest coverage covenants under its revolving credit facility.
ALSO READ:
Petra: Cost savings target increased to over US$30 million p/a
Despite these difficulties, Absa Bank has waived the covenant requirements, allowing the company to maintain sufficient liquidity. Peter Mallin-Jones, a research analyst at Peel Hunt, noted that obtaining this waiver was crucial and indicates lender support for finding solutions.
The company has also faced operational challenges, which recently led to the retrenching of 200 workers from its Cullinan and Finsch operations due to prolonged downturns influenced by global economic factors like reduced demand in China and the rise of lab-grown diamonds.
Contact Us
VUKA is the trusted media partner to key professionals, policy makers, suppliers and
manufacturers. We provide unparalleled opportunities for industry-wide connection.