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Petra Diamonds flags possible breach in bank agreements

Petra Diamonds Ltd. warned that it is likely to breach a key condition of its banking agreements related to a core earnings ratio for the year that ended June 30, after suffering a series of operational interruptions in Tanzania and South Africa, according to an Oct. 9 release.

The company disclosed Sept. 18 that its compliance with two EBITDA-related maintenance covenant measurements related to its senior debt facilities for the year and as of Dec. 31 remains sensitive to diamond price changes, exchange rates and expected production from its mines.

Labor disruptions at the company's Koffiefontein, Finsch and Kimberley operations and uncertainty around the final sales volume for the Williamson mine in the first half of fiscal 2018 placed the post year-end compliance further at risk.

Additionally, Petra noted that it retains sufficient liquidity from existing cash resources, operating cash flows and existing facilities to meet its liabilities.

The company is expected to release its annual report Oct. 16.