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SOAPSTONE INVESTMENT LIMITED - Notice to note holders regarding Diamondcorp plcs notice to appoint administrators and corporate update

Release Date: 03/05/2017 15:45
Code(s): DMCCB     PDF:  
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Notice to note holders regarding Diamondcorp plc’s notice  to appoint administrators and corporate update

Soapstone Investment Limited
(Incorporated in the Republic of South Africa)
(Registration number 2006/011940/06)
Soapstone stock code: DMCCB
ISIN: ZAE000180204
(“Soapstone”)

NOTICE TO NOTE HOLDERS REGARDING DIAMONDCORP PLC’S NOTICE TO APPOINT ADMINISTRATORS
AND CORPORATE UPDATE

Noteholders are advised of the Stock Exchange News Service (“SENS”) announcement released on 28 April
2017, on the alternative exchange of the JSE Limited (“the JSE”) by Diamond Corp PLC, the Guarantor to the
Soapstone ZAR40,000,000.00 14% Fixed Rate Senior Secured Convertible Registered Bonds. The content of
the announcement is set out below:

“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 GBP1m 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.”



3 May 2017

Debt Sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)

Date: 03/05/2017 03:45:00 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
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

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