Companies: PDL   

Headed by second-generation entrepreneur Adonis Pouroulis, Petra expects to increase its production to between 1.5 and two million carats a year by 2010 as a result of De Beers’ agreement to sell the Cullinan mine to the Petra Diamonds Cullinan Consortium (PDCC). Petra, which has gem interests in Angola and elsewhere, has a 37 per cent stake in the consortium and will contribute US$48.4 million (£23.5million) of the total $149 million (£72.2 million) buying price for the mine, which last year produced 1.15 million carats, worth £37.6 million.

PDCC will also assume certain liabilities, including a £24.7 million environmental rehabilitation obligation, attached to the mine, which in the last century produced the 3,106-carat Great Cullinan Diamond, the largest gem diamond ever found. From this were cut the 530-carat Great Star of Africa and the 317-carat Lesser Star of Africa, set in the British Crown Jewels.

The other participants in the PDCC are Saudi group Suleiman Abdul Aziz Al Rajhi Holdings, with 37 per cent, and three South African black economic empowerment groups, with a combined 26 per cent. PDCC’s overall commitment, including working capital, is £100 million, of which Al Rajhi is to pay £75 million, with £25 million coming from Petra, in which the Saudi Saad Investments has a big holding.

The money is due by mid-2008 and cash-rich Petra says it plans to pay out of its own resources. Al Rajhi, which owns 7.8 per cent of Petra, is providing guarantees for the Cullinan purchase price and has also been granted a warrant over another 1.5 million Petra shares at 180p up to November 2009.

Today, Petra shares, which Growth Company Investor recommended at 67.5p in 2005, trade at 148p, up 5.5p this morning. Hold on.

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Petra Diamonds	AIM	£138.41m	75.25p	2.25p
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