LONDON (AP) ¿ De Beers Group, the world's largest diamonds producer, said Tuesday that shareholders have agreed to a rights offering that will raise up to $1 billion to help reduce the company's debts.
Like other diamond producers, De Beers, which controls 40 percent of the global trade, has been hit by reduced spending on luxury items because of the financial crisis.
The company temporarily shut mines in South Africa, Botswana and Canada during the year to counter falling demand for diamonds. Some of the sites have reopened but others remain on production breaks.
"By reducing De Beers' level of external debt and improving its capital structure, this investment would better enable the company to take advantage of new opportunities and demonstrate the shareholders' confidence in De Beers' continued market leadership as the recession gives way to recovery," Lynette Gould, a London-based spokeswoman for De Beers, said in an e-mailed statement.
Gould said the take up of the rights offer would be in line with shareholdings ¿ Anglo American PLC owns 45 percent of the company, South Africa's Oppenheimer family 40 percent and the Botswana government 15 percent.
All have approved the rights issue in principle, subject to satisfactory refinancing of the company's existing debt, Gould said.