Petra Diamonds Limited (LON:PDL) has launched a deeply discounted US$178mln rights issue to pay off some of its mountain of debt.
Investors will receive five shares for every eight they currently hold at 40 pence each – 36p below Tuesday's closing price.
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The miner has been hit by a series of setbacks, including strike action in South Africa, an embargo on diamond exports from Tanzania and currency headwinds.
With net debt of US$622mln at the end of March, it is hoped the infusion of new cash will not only alleviate short-term financial concerns but also allow management to focus on "operational delivery and optimisation".
Chief executive Johan Dippenaar said: "By improving the group's financial and operational flexibility, the board believes this rights issue is in the best interest of its shareholders, positioning Petra to reap the benefits of this capital intensive phase by moving the focus to cost efficient production from the new undiluted mining blocks, with a reduced capital spend profile."