DiamondCorp to appoint administrators
JOHANNESBURG (miningweekly.com) – Embattled South African diamond development company DiamondCorp has filed notice of its intention to appoint Stephen Cork and Jo Milner of Cork Gully as joint administrators, after the board determined that the company is no longer able to continue trading as a going concern.
The company on Friday said the board has sought to explore all options available to it in relation to the ongoing business rescue process for its Lace Diamond Mines (LDM) operating subsidiary, as well as to the solvency of the company and all its subsidiaries.
DiamondCorp, in November 2016, appointed Daniel Terblance of Deloitte & Touche, and subsequently Lebogang Mpakati of Independent Advisory as business rescue practitioners for LDM.
Although progress had been made in terms of formal agreements and nonbinding agreements with a number of DiamondCorp’s creditors, including the Industrial Development Corporation of South Africa and Laurelton Diamonds, an agreement could not be reached with South African bondholders.
Insufficient progress had also been made in relation to the significant restructuring of debt and securing additional equity funding to allow for LDM’s successful exit from business rescue.
In addition, protracted discussions with the Association of Mineworkers and Construction Union, which were terminated in early April without agreement, had “obstructed the vital care and maintenance and remediation programme” at the Lace mine, resulting in all employees having to be retrenched.
DiamondCorp stated that this was the primary cause for the failure of the £1-million equity fundraise first announced in January.
That, in turn, has led to significant liquidity issues for DiamondCorp.
Notwithstanding the notice to appoint administrators to DiamondCorp, business rescue proceedings for LDM will continue, while options regarding DiamondCorp subsidiary DiamondCorp Holdings will be explored to try to preserve any remaining stakeholder value.
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