To view the PDF file, sign up for a MySharenet subscription.

ROCKWELL DIAMONDS INCORPORATED - Rockwell Provides Further Update On Three Subsidiaries In Business Rescue And Provisional Liquidation

Release Date: 22/09/2017 17:45
Code(s): RDI     PDF:  
Wrap Text
Rockwell Provides Further Update On Three Subsidiaries In Business Rescue And Provisional Liquidation

ROCKWELL DIAMONDS INCORPORATED
(A company incorporated in accordance with the laws of British Columbia, Canada)
(Incorporation number BCO354545)
(Formerly Rockwell Ventures Inc.)
(South African Registration number 2007/031582/10)
Share Code on the JSE Limited: RDI
ISIN: CA77434W2022
Share code on the TSXV: RDI
CUSIP Number: 7743W103
(“Rockwell”)

Rockwell provides further update on three subsidiaries in business rescue and
provisional liquidation

September 22, 2017, Toronto, ON -- Rockwell Diamonds Inc. ("Rockwell" or the "Company") (NEX:
RDI.H; JSE: RDI) provides a further update as to the developments with respect to its three subsidiaries
in South Africa. These subsidiaries are Rockwell Resources RSA (Pty) Ltd (Rockwell RSA), HC van
Wyk Diamonds Ltd (HC van Wyk) and Saxendrift Mine (Pty) Ltd (Saxendrift).

As previously advised last week, the Company received two offers which, when combined, serve
to buy out the Company’s operating assets in South Africa. The offers are from Istotron (Pty) Ltd,
a wholly owned subsidiary of Ascot Diamonds, which is an 18.2% shareholder of the Company,
and a significant secured creditor of Rockwell RSA.

The first offer was tendered to the Business Rescue Practitioners (BRPs) to purchase 100% of the
creditors’ valid and supported claims in the three entities. Following completion, the buyer would
be the only creditor and the business rescue process terminated. It was the intention of the buyer
to restart the Wouterspan mine, and to operate it under a similar plan thereafter. The BRPs
accepted the first offer as being in excess of liquidation value and therefore in the creditors ’
interest. Given this, the BRPs, Metis Strategy Advisors, through their legal counsel, Werksmans of
Johannesburg, attempted to obtain an agreement with labour as a first step.

The BRPs, Metis Strategic Advisors and their counsel, Werksmans of Johannesburg were unable
to conclude an agreement with labour in order to accept the offer under the business rescue
process in the two days that they had remaining, given that they had decided to proceed with a
provisional liquidation application to be heard today. That hearing was held and the three
subsidiaries were again placed in provisional liquidation. The mandate of the BRPs and their
counsel is therefore now terminated and they will have no further involvement other than to hand
over their workings to the appointed liquidators. Any remaining fees will be part of the general
creditor claims. The liquidators will be appointed within 3 business days of the court order, and
since Monday, September 25 is a public holiday in South Africa, the liquidators will be appointed
on or before Wednesday,27 September 2017.

Notwithstanding this, the buyer has indicated to the Company that they will proceed to work with
the provisional liquidator to buy the three subsidiaries out of the provisional liquidation process so
as to own the operation, the mining right, plant which will enable them to restart the mine. As the
three companies are only in provisional liquidation, the mineral and mining rights remain the
property of the three entities.

Given the progress that was achieved between the buyer and the Company in that last two
months, it is believed that a transaction can be achieved in the short term with the provisional
liquidator, as the offer is in excess of liquidation value.

A second offer was received whereby Ascot Diamonds will purchase 100% of the share capital of
N9C, 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 all provisional
liquidation claims against the South African subsidiaries.

The Company’s corporate structure is further outlined in the Annual Information Form filed May
29, 2017.The proceeds from such sale will be accrue to the Company for purposes of settling trade
creditors in the Company, and making proposal to shareholders to buy their shares. The two
debenture holders in the Company have indicated that they will not seek any repayment, will
surrender their debentures, and will accept the purchase of shareholders’ interests in order to
effect an orderly wind down of the Company.

Both of these offers will require court, regulatory and shareholder approval in Canada and in South
Africa, and are expected to take between 3 and 6 months to complete. Following approvals and
completion of the share buy back from shareholders, the Company is expected to surrender its
charter and thereby dissolve.

For further information on Rockwell and its operations in South Africa, please contact

 Mark Bristow             Chairman                             +44 7880711386

 David Tosi               PSG Capital – JSE Sponsor            +27 (0)21 887 9602

About Rockwell Diamonds
Rockwell is engaged in the business of operating and developing alluvial diamond deposits. The
Company also evaluates consolidation opportunities that have the potential to expand its mineral
resources and production and provide accretive value to the Company.

Rockwell has set a strategic goal to become a mid-tier diamond production company with specific focus
on the Middle Orange River region in South Africa.
As at the date of this document, Rockwell’s subsidiary in South Africa (Rockwell Resources RSA Pty
Limited) and its two subsidiaries (HC van Wyk Diamonds Limited and Saxendrift Mine Pty Limited) were
being operated under Business Rescue Management as ordered by the Court, following an application
by creditors of the three South African subsidiaries on May 18, 2017.

Rockwell’s common shares trade on the Toronto Stock Exchange NEX under the symbol “RDI.H” and
on the JSE Ltd under the symbol “RDI”. Trading of Rockwell’s shares remains suspended at the request
of the Company.

No regulatory authority has approved or disapproved the information contained in this
news release.
Forward Looking Statements

Except for statements of historical fact, this news release contains certain "forward -looking
information" within the meaning of applicable securities law. Forward-looking information is
frequently characterized by words such as "plan", "expect", "project", "intend", "believe",
"anticipate", "estimate" and other similar words, or statements that certain events or conditions
"may" or "will" occur. Although the Company believes the expectations expressed in such
forward-looking statements are based on reasonable assumptions, such statements are not
guarantees of future performance and actual results or developments may differ materially from
those in the forward-looking statements.

Factors that could cause actual results to differ materially from those in forward-looking
statements include uncertainties and costs related to the transaction and the ability of each
party to satisfy the conditions precedent in a timely manner or at all, exploration and
development activities, such as those related to determining whether mineral resources exist on
a property; uncertainties related to expected production rates, timing of production and cash and
total costs of production and milling; uncertainties related to the ability to obtain necessary
licenses, permits, electricity, surface rights and title for development projects; operating and
technical difficulties in connection with mining development activities; uncertainties related to
the accuracy of our mineral resource estimates and our estimates of future production and future
cash and total costs of production and diminishing quantities or grades of mineral resources;
uncertainties related to unexpected judicial or regulatory procedures or changes in, and the
effects of, the laws, regulations and government policies affecting our mining operations;
changes in general economic conditions, the financial markets and the demand and market
price for mineral commodities    such as diesel fuel, steel, concrete, electricity, and other forms
of energy, mining equipment, and fluctuations in exchange        rates, particularly with respect to
the value of the US dollar, Canadian dollar and South African Rand; changes in accounting
policies and methods that we use to report our financial condition, including uncertainties
associated with critical accounting assumptions and estimates; environmental issues and
liabilities associated with mining and processing; geopolitical uncertainty and political and
economic instability in countries in which we operate; and labour strikes, work stoppages, or
other interruptions to, or difficulties in, the employment of labour in markets in which we opera te
our mines, or environmental hazards, industrial accidents or other events or occurrences,
including third party interference that interrupt operation of our mines or development projects.

For further information on Rockwell, Investors should review Rockwell's home jurisdiction filings
that are available at www.sedar.com.

Date: 22/09/2017 05:45:00 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.

Share This Story