(Adds details credit, on management pay)
May 1 (Reuters) - Africa-focussed miner Petra Diamonds said on Friday it would hold off on making an interest payment on bonds due on May 1 and make use of a 30-day grace period to find a resolution with creditors that allows it to draw down other new borrowing.
The company has been in talks with its creditors to shore up its finances as the coronavirus outbreak forced it to scale back operations and hammered diamond prices.
Petra said on Friday it should shortly be able to draw ZAR400 million ($21.41 million) of a 1 billion rand revolving credit facility it was negotiating with its South African banking backers.
However, the facility is subject to the company not making the interest payments, Petra said.
Interest payments, payable semi-annually, are needed on May 1 and Nov. 1 for the company’s outstanding $650 million, 7.25% Senior Secured Second Lien Notes due 2022.
The company also said an ad-hoc group together holding more than 50% of the outstanding aggregate principal amount has retained Houlihan Lokey as financial adviser and White & Case LLP as legal adviser.
Petra said salaries of its chief executive and finance director will be reduced by one-third from April to June, while its non-executive directors will see a 25% cut in their pay.
The company’s South African operations has ramped up to a 50% labour capacity, but its Williamson mine in Tanzania remained on care and maintenance.
The diamond miner’s 2020 production guidance of 3.8 million carats also remained suspended. (Reporting by Shanima A in Bengaluru; editing by Patrick Graham and Sriraj Kalluvila)