https://www.miningweekly.com

Offer for Rockwell affiliates flops on BRP haste; orderly wind down still planned

23rd September 2017

By: Henry Lazenby

Creamer Media Deputy Editor: North America

     

Font size: - +

VANCOUVER (miningweekly.com) – Bankrupt alluvial diamond miner Rockwell Diamonds advised on Friday that it has received two offers which, when combined, would have been able to buy out the Canadian company’s distressed South African subsidiaries.

However, an untimely motion to place the affiliates into provisional liquidation placed too much pressure on negotiations, causing the deal to fall through.

Rockwell advised that Istotron, a subsidiary of Ascot Diamonds, which is an 18.2% shareholder of the company, and a significant secured creditor of Rockwell RSA, had tendered an offer to the business rescue practitioners (BRPs) Metis Strategy Advisors to buy all the creditors' valid and supported claims in the three entities.

Following completion, the buyer would have been the only creditor and the business rescue process terminated. The buyer intended to restart the flagship Wouterspan mine, in South Africa's Middle Orange River region, and to operate it under the existing mine plan thereafter.

The BRPs accepted the first offer as being more than liquidation value and therefore in the creditors' interest. Given this, the BRPs, through their legal counsel Werksmans of Johannesburg, attempted to obtain an agreement with labour as a first step.

However, the BRPs and Werksmans failed to settle a deal with labour in order to accept the offer, given that it only had two days remaining because the BRPs chose to proceed with a provisional liquidation application in the Kimberley High Court that was heard on Friday. Following the hearing, the three affiliates were once more placed into provisional liquidation.

Rockwell advised that the mandate of the BRPs and their counsel is now terminated and they will have no further involvement other than to hand over their workings to the appointed liquidators.

Any remaining fees will be part of the general creditor claims. The liquidators will be appointed by Wednesday.

Despite the misfortune, Rockwell said Istotron has indicated that they will proceed to work with the provisional liquidator to buy the three subsidiaries out of the provisional liquidation process so as to own the operation, the mining right, and plant, which will enable it to restart the mine. As the three companies are only in provisional liquidation, the mineral and mining rights remain the property of the three entities.

Rockwell still believes that a deal is possible with Istotron in the near term, since the offer is more valuable than the liquidation value, and the parties will work with the provisional liquidator to that end.

Rockwell also reported that it has received a second offer, whereby Ascot Diamonds will buy out Rockwell’s Cayman Island subsidiary N9C, which is the intermediate parent company of the South African entities. This offer is conditional on acquiring all provisional liquidation claims against the South African subsidiaries.

Rockwell said that the proceeds from such a sale will accrue to the parent company and will be used to settle trade creditors and to make a proposal to shareholders to buy their shares. The two debenture holders in the company have indicated that they will not seek any repayment, will surrender their debentures, and will accept the purchase of shareholders' interests in order to effect an orderly wind down of Rockwell, the company advised.

Both of these offers will require court, regulatory and shareholder approval in Canada and in South Africa, and are expected to take between three and six months to complete. Following approvals and completion of the share buy back from shareholders, the Rockwell is expected to surrender its charter and dissolve.

Edited by Creamer Media Reporter

Comments

Showroom

Magni SA
Magni SA

Magni SA is committed to developing the safest Telehandlers available to our customers for underground and surface mining, construction, forestry,...

VISIT SHOWROOM 
Werner South Africa Pumps & Equipment (PTY) LTD
Werner South Africa Pumps & Equipment (PTY) LTD

For over 30 years, Werner South Africa Pumps & Equipment (PTY) LTD has been designing, manufacturing, supplying and maintaining specialist...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Hyphen, Eva mine, ferrochrome price make headlines
Hyphen, Eva mine, ferrochrome price make headlines
27th March 2024
Resources Watch
Resources Watch
27th March 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.086 0.119s - 88pq - 2rq
Subscribe Now