(Corrects headline to say shareholder sold 70 percent of its stake in the company, not a 70 percent stake)
July 29 Petra Diamonds Ltd said its second-largest shareholder sold more than two thirds of its stake in the diamond miner through a placement at a discount of 12 percent to the stock's Monday close.
The stock was down 11 percent at 193.25 pence at 1042 GMT on the London Stock Exchange. The stock had fallen 12 percent earlier on Tuesday on rumours of the placement.
Awal Bank placed 43 million shares with UK and international institutions at 190 pence per share or about 82 million pounds ($139 million).
A further 13.2 million shares held by Awal Bank - owned by Maan al-Sanea, the Saudi billionaire head of the Saad Group - are subject to a 90 day lock-up, Petra said in a statement.
Petra's website shows that Awal Bank held 60.8 million shares or 11.9 percent in Petra through Saad Investments Co Ltd.
The miner said it was unaware if the remaining 4.6 million shares held by Awal Bank were to be sold at this time.
Petra, which has five producing mines in South Africa and one in Tanzania, reported a 17 percent jump in full-year production on Monday. ($1 = 0.5900 British Pounds) (Reporting by Karen Rebelo in Bangalore; Editing by Savio D'Souza)