Rockwell Diamonds Inc. has provided a further update as to the developments with respect to its three subsidiaries in South Africa, which were placed in provisional liquidation on 12 September 2017. These subsidiaries are Rockwell Resources RSA (Pty) Ltd, HC van Wyk Diamonds Ltd and Saxendrift Mine Ltd.
Friday 3 November 2017 was the return date for the liquidation applications against the company's three subsidiaries, including the applications initiated by the business rescue practitioners (BRPs) previously appointed in respect of the subsidiaries, as well as the applications initiated in November 2016 by C-Rock Mining Ltd (C-Rock).
Following discussions between counsel for the companies, the BRPs, C-Rock and two parties who applied for leave to intervene in the proceedings, namely, Ascot Diamonds Ltd (Ascot) and Nelesco 318 Ltd, it was resolved by agreement that both sets of liquidation applications be postponed to 16 March 2018. The applications for leave to intervene would be dealt with prior to the liquidation applications, namely, on 23 February 2018.
The court endorsed the agreement and ordered that the liquidation applications be postponed until 16 March 2018.
Following the postponement, Ascot now, through its subsidiary Istotron, has time to continue with its proposal to acquire the three South African subsidiaries by means of a compromise of claims and then proceed to acquire N9C, one of the Cayman subsidiaries.
The preliminary offer is structured to acquire the business as a going concern, and thus includes an offer of compromise of creditors and claims which would enable Ascot (through its subsidiary) to take over the Wouterspan mine and restart it.
Once that transaction is agreed with the liquidators and approved by the creditors, a second offer from Ascot (through Isotron Ltd) would proceed whereby Ascot Diamonds will purchase 100% of the share capital of N9C Resources Ltd, the company`s Cayman Island subsidiary which is the intermediate parent company of the South African entities. This offer is conditional on the successful acquisition from provisional liquidation of all claims against the South African subsidiaries, as well as shareholder approval at the company level.