Rockwell Files for Business Rescue, Says Plan is Supported by 96% of Creditors
Rockwell Diamonds Inc. said that it has submitted a filing for business rescue with a plan that, it says, has the support of 96% (by dollar value) of the Company creditors. The plan is mainly comprised of provision of USD $8mn in loan capital for completing the Wouterspan plant and other related measures.
In addition the plan will focus on cost reduction, efficiency improvements, the sale of certain redundant assets, the pay down of all creditors under ZAR50,000, and the purchase of all recent plant and mine supplies on a cash only basis. The plan also includes completion of the commissioning and ramp-up of the production rate of the processing plant at Wouterspan and relocation of the Holsloot plant to Stofdraai (the northern edge of Wouterspan).
If the application is accepted, 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, and well as considering strategic alternatives.
Rockwell said that currently the Wouterspan plant is nearing completion, with ore being processed through lines 1 and 2 and commissioning of line 3 now complete, to be followed by the ramp-up in processing rate.
Meanwhile, the Company said it is awaiting the final court verdict on an appeal againist the interim liquidation order against three subsidiaries of the Company issued by a judge in Kimberley, South Africa, on March 23, 2017 in a case brought by C-Rock Mining. Rockwell said that the interim order was passed after a short hearing in which its rebuttal evidence was not considered.
The hearing was preponed from its initial date of June 22, but could not be heard on April 12 as the Kimberley High Court is currently in recess and the Acting Judge on duty on the day was conflicted and therefore recused herself.
Rockwell stated that the effect of a business rescue filing is that any liquidation order is automatically stayed.