JOHANNESBURG (miningweekly.com) – Dual-listed alluvial diamond miner Rockwell Diamonds’ move to file for business rescue to ensure any liquidation order is automatically stayed, has inadvertently removed the “urgency” it sought to establish by bringing forward the hearing date for the interim liquidation order against three of its subsidiaries.
Following the March 23 interim liquidation order against subsidiaries Rockwell Resources RSA, HC van Wyk Diamonds and Saxendrift Mine Limited owing to an application launched by former Rockwell contractor C-Rock Mining, Rockwell approached the Kimberley High Court to have the June 22 liquidation hearing date brought forward to “as early as possible” to have the merits of the company’s liquidation application rebuttals adjudicated.
With the upcoming business rescue hearings, which are scheduled for May 12, the powers of the provisional liquidators and the liquidation process have been suspended, allowing the subsidiaries to “carry on business”. Judge CC Williams, therefore, determined that “urgency was no longer a consideration” and maintained the hearing date for June 22.
While not the outcome Rockwell was seeking, it conceded that there was no pressing practical need to bring the final hearing date in the liquidation proceedings forward.
The company previously stated that it believed the subsidiary companies did not meet the criteria required for liquidation, and that the company had been advised that its bank and most of the creditors would oppose the liquidation application at the final hearing.
Rockwell filed for business rescue mid-April, noting that, if successful, a business rescue practitioner will be appointed to work with company management to restructure the affairs of the company, seeking input and consent from creditors, as well as considering strategic alternatives.
The business plan includes the provision of $8-million in loan capital, completing the Wouterspan plant with such proceeds, a focus on cost reduction, efficiency improvements, the sale of certain redundant assets, the pay down of all creditors under R50 000, as well as the purchase of all recent plant and mine supplies on a cash-only basis.
Rockwell has made significant commercial progress, with its Wouterspan plant now in the ramp-up stage after commissioning.
In April, one of the diamonds recovered was a 60 ct stone that had sold for $8 000/ct.