Wrap Text
New Financing Facility Totalling £700,000
Board Changes
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 Group” or "the Company")
NEW FINANCING FACILITY TOTALLING £700,000
BOARD CHANGES
DiamondCorp plc, the Southern Africa focussed diamond mine development and exploration
company, is pleased to announce that, following the accelerated financing discussions as
previously announced, the Company has entered into a Shariah-compliant secured
convertible financing facility (the “Facility”) with Rasmala plc (“Rasmala”), a leading
independent investment manager and shareholder in the Company.
Financing Facility
The Company and Rasmala have agreed to the drawdown by DiamondCorp of two tranches
under the Facility, for a total principal amount of £700,000. The first of the tranches (the “First
Tranche”), in the amount of £400,000, is to be drawn down immediately. The second of the
tranches (the “Second Tranche”), in the amount of £300,000, is anticipated to be drawn down
in the near term.
The Facility will mature on 15 December 2016, with the option for early repayment at
DiamondCorp's discretion. The Facility is to be repaid either in cash or convertible at
Rasmala's discretion on maturity of the Facility (or earlier in certain circumstances as detailed
below) into new ordinary shares at the equivalent of a 30 per cent. discount to the average
daily volume weighted average price of the Ordinary Shares across each trading day from the
date of the agreement of the Facility to the date of conversion. DiamondCorp will pay a
markup on the commodities underpinning the Facility (whose value is equal to the principal
drawn down) at an equivalent rate of 15 per cent per annum during the eight week term. The
Facility is secured against up to 5,000 carats of diamonds currently held in inventory and/or to
be produced from operations. Further details of the Facility terms are provided below.
The proceeds of the Facility will satisfy the Company's immediate term funding requirement of
not less than approximately £500,000, and shall be utilised for working capital purposes,
which, as per previous announcements, the Company urgently required in order to continue
trading as a going concern in the immediate term.
Board Changes
The Company also announces the following Board changes pursuant to the terms of the
Facility:
Euan Worthington, current Chairman of DiamondCorp, has resigned from the Board, effective
immediately, but shall remain as an employee of the Company for the immediate future in
order to ensure an orderly handover of his responsibilities.
Chris Ellis, current Non-Executive Director of DiamondCorp, shall shortly be formally
appointed as Independent Interim Non-Executive Chairman and on or by 31 October 2016. It
is currently intended that Mr Ellis appointment shall be on an interim basis to oversee the
formal sale process as announced on 18 October 2016 (“Formal Sale Process”).
Rasmala has been granted the right to appoint an individual to the Board of DiamondCorp,
subject to satisfactory completion of terms and in accordance with applicable rules and
regulations. The right by Rasmala is in addition to the continued role of Michael Toxvaerd as
Non-Executive Director of both DiamondCorp and Rasmala.
Further announcements in relation to the forthcoming changes to the Board shall be made as
appropriate.
Financial and Corporate Update
As also previously announced, and notwithstanding entry into the Facility, the Company
requires an additional equity and/or debt financing of c.£2.5 to £3.0 million in the near term to
cover the anticipated cash required to fund operations through to commercial production.
There can however be no certainty that the Company will subsequently secure the necessary
funding solutions to meet its longer term financial requirements.
Pursuant to the Formal Sale Process, as entered into on 18 October 2016, the Board
continues to explore all options available to the Company in parallel with its discussions to
secure additional funding, including a corporate transaction such as a merger with or offer for
the Group by a third party or a sale of the Group's businesses.
Consequently, and also pursuant to the terms of the Facility and in accordance with Rule 21.1
of the Takeover Code (the “Code”), it is the Board's intention to convene a General Meeting
as soon as possible in order to seek shareholders approval to provide the Board with
increased authorities to, inter alia, allot and issue equity securities and to dis-apply statutory
pre-emption rights in the event of a requested conversion of the Facility (in excess of the
current authorised share capital). The passing of the requisite resolutions are a condition of
the Facility. A further announcement in relation to the publication of the circular to
shareholders, and notice of General Meeting, is due to be made on or prior to 31 October
2016.
Paul Loudon, CEO, commented, “We are pleased to have secured this new financing
facility, which will enable us to sustain our operations at the Lace diamond mine whilst we
conduct our Formal Sale Process and evaluate all options available to us.”
“I would like to take this opportunity to thank Euan for the contribution he has made to the
Company as Chairman since its IPO in 2007, including financial support in every fund raising
and a deep experience in the London mining capital markets which proved invaluable at
board level. We wish him the greatest of success in his future endeavours.”
“I look forward to welcoming Chris into his new position in due course and I look forward to
working with him during this challenging stage of the Company's development.”
Further Terms of the Facility and Regulatory Disclosures
The Facility is structured as a Shariah-compliant commodity murabaha agreement with the
option to convert.
Under the terms of the Facility, DiamondCorp will pay a markup on the commodities
underpinning the Facility (whose value is equal to the principal drawn down) at an equivalent
rate of 15 per cent per annum during the eight week term (payable in either cash or new
DiamondCorp ordinary shares at Rasmala's discretion). In the event of a delay payment, the
Company must pay a daily delay payment from the due date to the date of actual payment on
the overdue amount at a rate of 2 per cent. per annum in addition to the Facility rate of 15 per
cent. per annum. This penalty is structured in a Shariah-compliant manner.
The Company is required pursuant to the terms of the Facility to convene a General Meeting
as soon as possible, with such circular published on or prior to 31 October 2016, to seek to
obtain shareholder approval to increase authorities to a level considered sufficient to fulfil its
obligations to issue Ordinary Shares to Rasmala pursuant to the terms of the Facility.
Rasmala shall be precluded from issuing a conversion notice for any number of new ordinary
shares as shall (i) exceed the current authorised share capital of the Company unless and
until increased by way of the passing of a resolution(s) at a general meeting of the Company;
(ii) result in Rasmala holding in excess of 29.99 per cent of the issued ordinary shares of
DiamondCorp as at the conversion date; and/or otherwise trigger an obligation to make a
mandatory offer of the Company.
The outstanding principal amounts of the Facility drawn down by DiamondCorp under the
Facility may become repayable (in either cash or new DiamondCorp ordinary shares at
Rasmala's discretion) ahead of maturity of the Facility in the event that, and at Rasmala?s
discretion, the Company: (i) has released one or more announcements pursuant to Rule 2.4
of the Code („the announcement of a possible offer) and/or (ii) has released one or more
announcements pursuant to Rule 2.7 of the Code („the announcement of a firm intention to
make an offer).
Rasmala shall put in place appropriate confidentiality provisions to ensure that members of its
board and staff who, under all applicable rules and regulations, are classified as insiders for
the purpose of inside information in relation to the Company are appropriately segregated
from the team authorised to deal with the Facility and the arrangements arising thereunder.
An administration fee of £25,000 in respect of the First Tranche has become payable to
Rasmala, and a further administration fee of £25,000 in respect of the Second Tranche will be
paid by the Company pro rata to the total amount drawn down under the Facility relative to
the total principal amount. The Company shall also reimburse appropriate legal costs
incurred.
The First Tranche of the Facility is collateralised against 2,800 carats of the Company's
current diamond inventory. The Second Tranche of the Facility is to be collateralised against
an additional 2,200 carats, in aggregate, of the Company's future diamond inventory, to be
supplied in instalments every week from Lace mine production.
The Facility provides for customary events of default. On and at any time after the occurrence
of an event of default, Rasmala may at its absolute discretion by written notice to the
Company, declare all outstanding amounts under the Facility to be immediately due and
payable, together with any other sums then owed by the Company to Rasmala.
Where a company enters into a related party transaction, under the AIM Rules for Companies
(the “AIM Rules”) the independent directors of the company are required, after consulting with
the company's nominated adviser, to state whether, in their opinion, the transaction is fair and
reasonable in so far as its shareholders are concerned.
By virtue of both Rasmala's current interests in the Company, which represent approximately
11.6% of the Company's issued share capital, and current Board representation, it is
considered to be a "related party" as defined under the AIM Rules and accordingly the Facility
is considered to be a "related party transaction" for the purposes of Rule 13 of the AIM Rules.
The independent directors of DiamondCorp (being each of the directors with the exception of
Michael Toxvaerd, who is also a director of Rasmala), having consulted with the Company's
nominated adviser, Panmure Gordon (UK) Limited, consider that the terms of the Facility are
fair and reasonable insofar as the Company's shareholders are concerned.
Contact details:
DiamondCorp plc
Paul Loudon, Chief Executive
Tel: +27 56 216 1300
Chris Ellis, Interim Chairman-designate
Tel: +44 (0) 20 3151 0970
UK Broker & Nomad
Panmure Gordon (UK) Limited
Adam James/Karri Vuori/Atholl Tweedie
Tel: +44 20 7886 2500
JSE Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
Megan Young
Tel: +27 11 445 8068
SA Corporate Advisor
Qinisele Resources Proprietary Limited
Dennis Tucker/Andrew Brady
Tel: +27 11 883 6358
This announcement contains inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No 596/2014 ("MAR"). Market soundings, as defined in MAR, were
taken in respect of the Facility, with the result that certain persons became aware of certain
inside information in relation to the Facility, as permitted by MAR. That inside information is
set out in this announcement. Therefore, those persons that received inside information in
relation to the Facility in a market sounding are no longer in possession of such inside
information relating to the Company and its securities.
The notification below, made in accordance with the requirements of the EU Market Abuse
Regulation, provides further details in respect of Michael Toxvaerd's interest in the Facility
described above. Michael Toxvaerd is a director of Rasmala and of DiamondCorp.
Michael Toxvaerd
1 Details of the person discharging managerial responsibilities / person closely
associated
a) Name Michael Toxvaerd
2 Reason for notification
a) Position / status Non-Executive Director
b) Initial notification / amendment Initial
3 Details of the issuer, emission allowance market participant, auction platform,
auctioneer or auction monitor
a) Name DiamondCorp plc
b) LEI (Pending)
4 Details of the transaction(s): section to be repeated for (i) each type of instrument;
(ii) each type of transaction; (iii) each date; and (iv) each place where transactions
have been conducted
a) Description of the financial Secured financing facility with the option to convert into
instrument, type of instrument new ordinary shares of 0.1 pence each in
DiamondCorp plc
Identification code ISIN: GB00B183ZC46
b) Nature of the transaction Entry into a convertible debt facility with Rasmala plc
(of which Michael Toxvaerd is also a director)
c) Price(s) and volumes(s) Price(s) Volume(s)
Conversion price(s) to Dependent on
be calculated according conversion price(s)
to VWAP, as described
above
d) Aggregated information N/A
e) Date of the transaction 2016-10-20
f) Place of the transaction London Stock Exchange, AIM (XLON)
20 October 2016
United Kingdom
JSE Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
Date: 20/10/2016 04:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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