Companies: PDL   

Petra Diamonds is buying gem explorer Xceldiam’s Angolan interests for £32 million in shares and raising a £10 million loan.

AIM-quoted Petra, headed by second-generation entrepreneur Adonis Pouroulis, is issuing shares to buy Frannor BVI, the company through which fellow AIM counter Xceldiam holds its stake in Angola’s Luangue diamond project. Luangue borders Alto Cuilo, the Angolan diamond project in which Petra is joint venture partner with mining giant BHP Billiton, and this deal should enable Petra to put them together.

The agreed offer for Frannor from Petra, which is also raising a $20 million (£10 million) convertible loan with BHP Billiton, values Xceldiam at nearly £32 million, allowing for its £650,000 remaining cash. This represents a 44 per cent premium on the stock market value of Xceldiam, never an exciting AIM performer, in January before it announced it was talking to another party.

Xceldiam, whose shares are 1.5p up today at 50.5p, will retain its cash and its quote as a shell looking for mining investments. Chairman and chief executive Tim George, an ex-De Beers luminary, will resign with his fellow directors when the Frannor deal is completed.

Petra shares are 2.5p up today at 159p, valuing the company at £237 million, and have more than trebled since autumn 2004. Hold on.

Petra Diamonds	AIM	£129.67m	70.50p	0.25p
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