Independent mining group Petra Diamonds has appointed Vivek Gadodia and Juan Kemp as interim CEOs following the immediate resignation of Richard Duffy by mutual agreement.
Gadodia will oversee corporate matters, while Kemp will manage operational affairs. However, neither will be appointed as directors at this stage.
Gadodia, who joined Petra in 2021, has held roles including Planning and Corporate Planning Executive and Chief Restructuring Officer.
Previously, he spent 15 years at Sasol in engineering, project management, and corporate positions.
Kemp became part of Petra in 2009 when the company acquired its flagship Cullinan mine from De Beers. He served as the mine’s General Manager from 2011, was appointed Chief Technical Officer in 2019, and became Operations Executive for Cullinan in 2024. His experience includes roles at De Beers and AngloGold Ashanti.
Financial Struggles and Cost-Cutting
Petra faces financial challenges, with declining earnings and high debt levels. For the six months ending December 31, 2024, the company reported:
- A 19% reduction in mining and processing costs to $98 million
- A 30% revenue decline to $115 million, compared to the previous year
- Adjusted EBITDA of $15 million, down from $38 million in the prior year
- A net loss per share of $0.30 from continuing operations
Operational free cash flow improved to $16 million, compared to a $21 million outflow in the previous year, driven by cost-cutting measures.
However, Petra failed to meet leverage and interest cover covenant ratios in its revolving credit facility. The company has since secured a waiver from lender Absa Bank and is engaging with financial institutions to refinance its debt.
As of December 31, 2024, Petra’s net debt stood at $215 million, up from $193 million in June, due to market weakness and delayed diamond sales.
To strengthen its position, Petra has been restructuring its operations:
- Koffiefontein Mine Sale: The company sold its stake to Stargems Group, avoiding $23 million in closure costs.
- Williamson Mine Sale: A deal was signed in January to sell its interest to Pink Diamonds Investments for $16 million, with completion expected by year-end.
- Finsch Mine Expansion: Production has shifted to the new 78-Level Phase 2, ensuring stable output.
- Cullinan Mine Developments: Production from the CC1E zone has commenced, while further expansion projects are ongoing.
Petra plans to re-engage lenders with a revised business strategy and expanded cost-saving measures as part of its overall restructuring.
The company remains focused on generating positive free cash flow and strengthening its resilience against weak diamond prices.
