Dar Es Salaam: Petra Diamonds has agreed to sell a 50% of the entity that holds its shareholding in Williamson Diamonds Limited (WDL), the operator of the Williamson Mine, to Caspian for $15 million.

Caspian is a long-term technical services contractor at the Williamson Mine in Tanzania.

WDL is currently 75% owned by Petra, 25% owned by the government of Tanzania, however, further to the framework agreement with the latter, the former’s effective interest is due to decrease to 63% while that of the government will increase to 37%.

Upon completion of the transaction, Petra and Caspian will each indirectly hold a 31.5% stake in WDL but with Petra retaining a controlling interest in WDL.

“Our new arrangement with Caspian, following the Framework Agreement signed with the Government of Tanzania on 13 December, puts Williamson on a very solid basis for the future,” said company chief executive Richard Duffy.

“The reduction in Petra’s equity interest into WDL, from 75% to 31.5% while still retaining control, both reduces Petra’s exposure in line with our stated objectives outlined in our Preliminary Results while maintaining a share of the upside that we believe exists following the signing of the Framework Agreement with the Government who continue as partners.”

Caspian’s purchase will be funded through the settlement of $11.1 million of past technical services payments owed by WDL to Caspian, including services rendered during the recent restart of operations following the care and maintenance period.

The remaining amount would be funded by Caspian rendering $3.9 million of technical services to WDL in order to ramp up operations at the Williamson Mine.

The parties are seeking to obtain all approvals by the end of the first half of 2022.