DIAMONDCORP PLC - Notice of intention to appoint administrators and Corporate Update

Release Date: 28/04/2017 13:15
Code(s): DMC
 
Wrap Text
Notice of intention to appoint administrators and Corporate Update

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 Company” or “the Group”)

Notice of intention to appoint administrators and Corporate Update

DiamondCorp, today announces that the Board, having taken advice, has concluded that the
Group is no longer able to continue trading as a going concern and has filed notice of
intention to appoint Stephen Cork and Jo Milner of Cork Gully LLP as joint administrators to
DiamondCorp plc.

In accordance with statutory requirements, the notice of intention to appoint administrators will
expire 5 business days after today following which an appointment of administrators can take
place within a further 5 business days thereafter if the financial status of the Company has not
changed.

Since the appointment in November 2016 of Daniel Terblanche of Deloitte & Touche, and
subsequently Lebogang Mpakati of Independent Advisory (Pty) Ltd, as Business Rescue
Practitioners of the Company’s operating subsidiary Lace Diamond Mines (Pty) Ltd (“LDM”),
the Board have sought to explore all options available to the Group in relation to the ongoing
Business Rescue process and the solvency of each of the Company and the Company’s
subsidiaries.

As previously announced, progress has been made in relation to formal agreements and non-
binding agreements in principle with a number of the Group’s creditors, notably the Industrial
Development Corporation of South Africa (the "IDC") and Laurelton Diamonds Inc.,
respectively. Nevertheless, no agreement in principle could be reached with South African
bond holders in particular and, more generally, insufficient progress has been made in
relation to an accelerated plan and formal route for funding, including a significant
restructuring of all debt and additional equity funding to allow for a successful exit from the
Business Rescue process. In addition, the protracted discussion with the Association of
Mining & Construction Union ("AMCU"), which was terminated in early April 2017 without
agreement, obstructed the vital care and maintenance and remediation programme of the
mine, caused all employees to be retrenched, and was the primary cause for the £1m equity
fundraise as first announced in January 2017 to not be successfully settled. This in turn has
led to significant liquidity issues for the Group and particularly the Company, which is now
considered to no longer be able to continue trading as a going concern.

Notwithstanding the notice to appoint administrators to DiamondCorp plc, it is currently
anticipated that the Business Rescue proceedings of LDM will continue and options regarding
DiamondCorp Holdings Limited (“DCH”, a wholly owned subsidiary of the Company
incorporated in the British Virgin Islands) will be explored further in order to try and preserve
any remaining stakeholder value.

The Board of DiamondCorp wish to thank all its shareholders for their support over the years
and particularly those who had intended to participate in the January 2017 placing, which
subsequently had to be cancelled.

The suspension to trading in the Company’s shares on AIM and AltX, as announced on 14
November 2016, remains effective. Pursuant to Rule 41 of the AIM Rules for Companies, the
Company’s admission to trading on AIM is therefore currently due to be cancelled on 15 May
2017. The status of the admission to trading on AltX will be advised as soon as possible.
Further announcements will be made by the Company as appropriate.


This announcement contains inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No 596/2014.



Contact details:

DiamondCorp plc
Chris Ellis, Interim Non-Executive Chairman
Tel: +44 (0) 20 3151 0970
Paul Loudon, Chief Executive
Tel: +27 56 216 1300

UK Broker & Nominated Adviser
Panmure Gordon (UK) Limited
Adam James / Atholl Tweedie / Tom Salvesen
Tel: +44 20 7886 2500

JSE Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
Megan Young
Tel: +27 11 445 8068

United Kingdom
28 April 2017

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