Administration-led DOCA offers lifeline to Lucapa
Lucapa Diamond Company, the Perth-based miner behind the Lulo alluvial mine in Angola and the Merlin project in Australia, has secured a potential lifeline through a planned Deed of Company Arrangement (DOCA) that promises full repayment to creditors and a partial return to shareholders.
Administrators Richard Tucker and Paul Pracilio of KordaMentha were appointed in May after Lucapa faced plummeting diamond markets and operational strains. They recently reached a binding term sheet with Dubai-based Gaston International, part of the broader Jemora Group, setting the stage for a restructuring that would transfer Lucapa’s shares to the proponent, subject to creditor and court approvals.
Under the proposed DOCA, creditors stand to receive 100c on the dollar, while shareholders may receive up to A$0.018 a share. That potential payout exceeds Lucapa’s last traded share price of around A$0.014 a share.
The company has struggled amid a downturn in diamond prices.
Gaston International invests heavily in mining globally, with a particular affinity for critical minerals and gemstones. Its interest in Lucapa could give the company access to high-value assets while securing its Angolan and Australian operations.
KordaMentha’s dual-track recapitalisation and sale process hinges on creditor approval at meetings scheduled for August 20, court clearance under a key provision of the Australian Corporations Act, and any regulatory consents. If successful, the DOCA would preserve Lucapa’s operations and deliver better outcomes than liquidation, the administrators stated.
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