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Diamondcorp Plc - Notice of intention to appoint administrators

RNS Number : 7139D
Diamondcorp Plc
28 April 2017
 

28 April 2017

 

DiamondCorp plc

 

AIM share code: DCP & JSE share code: DMC

ISIN: GB00B183ZC46

(Incorporated in England and Wales)

(Registration number 05400982)

(SA company registration number 2007/031444/10)

 

("DiamondCorp", "the Company" or "the Group")

 

Notice of intention to appoint administrators

and

Corporate Update

 

DiamondCorp, today announces that the Board, having taken advice, has concluded that the Group is no longer able to continue trading as a going concern and has filed notice of intention to appoint Stephen Cork and Jo Milner of Cork Gully LLP as joint administrators to DiamondCorp plc.

 

In accordance with statutory requirements, the notice of intention to appoint administrators will expire 5 business days after today following which an appointment of administrators can take place within a further 5 business days thereafter if the financial status of the Company has not changed.

 

Since the appointment in November 2016 of Daniel Terblanche of Deloitte & Touche, and subsequently Lebogang Mpakati of Independent Advisory (Pty) Ltd, as Business Rescue Practitioners of the Company's operating subsidiary Lace Diamond Mines (Pty) Ltd ("LDM"), the Board have sought to explore all options available to the Group in relation to the ongoing Business Rescue process and the solvency of each of the Company and the Company's subsidiaries.

 

As previously announced, progress has been made in relation to formal agreements and non-binding agreements in principle with a number of the Group's creditors, notably the Industrial Development Corporation of South Africa (the "IDC") and Laurelton Diamonds Inc., respectively. Nevertheless, no agreement in principle could be reached with South African bond holders in particular and, more generally, insufficient progress has been made in relation to an accelerated plan and formal route for funding, including a significant restructuring of all debt and additional equity funding to allow for a successful exit from the Business Rescue process. In addition, the protracted discussion with the Association of Mining & Construction Union ("AMCU"), which was terminated in early April 2017 without agreement, obstructed the vital care and maintenance and remediation programme of the mine, caused all employees to be retrenched, and was the primary cause for the £1m equity fundraise as first announced in January 2017 to not be successfully settled. This in turn has led to significant liquidity issues for the Group and particularly the Company, which is now considered to no longer be able to continue trading as a going concern.

 

Notwithstanding the notice to appoint administrators to DiamondCorp plc, it is currently anticipated that the Business Rescue proceedings of LDM will continue and options regarding DiamondCorp Holdings Limited ("DCH", a wholly owned subsidiary of the Company incorporated in the British Virgin Islands) will be explored further in order to try and preserve any remaining stakeholder value.

 

The Board of DiamondCorp wish to thank all its shareholders for their support over the years and particularly those who had intended to participate in the January 2017 placing, which subsequently had to be cancelled.

 

The suspension to trading in the Company's shares on AIM and AltX, as announced on 14 November 2016, remains effective. Pursuant to Rule 41 of the AIM Rules for Companies, the Company's admission to trading on AIM is therefore currently due to be cancelled on 15 May 2017. The status of the admission to trading on AltX will be advised as soon as possible.

 

Further announcements will be made by the Company as appropriate.

 

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014.

 

 

 

Contact details:

 

DiamondCorp plc

Chris Ellis, Interim Non-Executive Chairman

Tel: +44 (0) 20 3151 0970

Paul Loudon, Chief Executive

Tel: +27 56 216 1300

 

UK Broker & Nominated Adviser

Panmure Gordon (UK) Limited

Adam James / Atholl Tweedie / Tom Salvesen

Tel: +44 20 7886 2500

 

JSE Designated Adviser

Sasfin Capital (a division of Sasfin Bank Limited)
Megan Young

Tel: +27 11 445 8068

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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Quick facts: Diamondcorp Plc

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Market: AIM
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