Rockwell Diamonds Inc. (“Rockwell” or the “Company”) (TSX:RDI; JSE:RDI) provides an update to the interim liquidation application brought by C-Rock Mining Limited (”CML”) against three subsidiaries of the Company, which resulted in a provisional winding-up order having been issued by a judge in Kimberley, South Africa on March 23, 2017 in respect of Rockwell Resources RSA (Pty) Ltd (Rockwell RSA), HC van Wyk Diamonds Ltd (HC van Wyk) and Saxendrift Mine (Pty) Ltd (Saxendrift).
As quoted in the press release:
The Company’s subsidiaries again attended in court in Kimberley, South Africa on May 18, 2017. The only issue at hand in the hearing was three applications to have the three subsidiaries placed in business rescue (as opposed to liquidation). The application was successful. The orders placing the subsidiaries in business rescue support the Company’s contention that there is a reasonable prospect of rescuing the subsidiaries and restoring them to long-term profitability.
The effect of the order is that the joint business rescue practitioners will oversee the affairs of the subsidiaries, work alongside the Company’s management to right the businesses of the subsidiaries, and prepare a business rescue plan (to be approved by creditors of the subsidiaries) aimed at ensuring a return to commercial operations. The immediate effect is that all legal proceedings against the subsidiaries are stayed, and the liquidation process is suspended. The Company will also pursue its criminal and civil claims against CML and certain individuals involved in the business of CML.