This follows extensive discussions between DiamondCorp and the Industrial Development Corporation of South Africa (IDC) and the Association of Mining & Construction Union (AMCU).
Consequently all employees were retrenched effective 3 April 2017. As a further consequence of the retrenchment, the senior secured status necessary for the effectiveness of the post commencement finance pursuant to the IDC agreement is no longer available for new funding, as in a liquidation priority is given to amounts due relating to employment.
Following discussions with affected parties, Lace Diamond Mine has appointed Lebogang Mpakati, an independent advisor as joint business rescue practitioner, alongside Daniel Terblanche of Deloitte & Touche.
The board of DiamondCorp has advised the business rescue practitioner and the IDC that unless there is an accelerated plan and route for funding in place which can be completed by mid-May 2017, including a significant restructuring of all debt, and successful exit from the business rescue process, then it is likely that the group would need to be placed into administration.
In February it was outlined that in the event that the original agreement in principle was not finalised in the very near term DiamondCorp’s, ability to effectively execute the Lace Diamond Mine’s care and maintenance and the remediation programme would be compromised. The IDC agreement was also subject to entering into such an agreement with AMCU, unless otherwise waived by DiamondCorp.
At the time the board of DiamondCorp reiterated that there could be no assurance that an appropriate agreement with AMCU could be obtained in sufficient time, or at all or that sufficient finance be obtained to continue with the business rescue process.
Feature image credit: DiamondCorp
(DiamondCorp’s Lace diamond mine)