Petra shares drop on rising debt

SHARES in FTSE 250 diamond miner Petra plunged 6.4pc after it pushed back its production guidance and unveiled higher than expected spending and debt.

The mining group, which has borrowed heavily to expand South African mines previously owned by industry leader De Beers, reported record production and sales for the year to June 30. But Petra shares fell 7p to 102.8p yesterday after it confirmed it was in discussions with its lenders to avoid breaching its debt covenants.

Petra’s net debt stood at $554.4m (£425m) at the end of June, against $382.8m a year ago, with the company promising it will begin to fall from the start of 2018.

Production rose 8pc to 4m carats this year, while revenue climbed 11pc to $477m.

Diamond prices rose 2pc.