Rockwell Diamonds Reports Financial Results

On Monday, Rockwell Diamonds Inc. (JSE:RDI) filed its third-quarter 2018 results, and provided a further update as to developments with respect to its three subsidiaries in South Africa.
As quoted in the press release:

• The financial results presented included the financial statements of the Company and its two subsidiaries in Cayman Islands, but did not consolidate the three subsidiaries in South Africa. The Company no longer has control over the three subsidiaries sufficient to consolidate under IFRS.
• The financial results show a nine-month comprehensive income (but non cash) of $22.6M which results almost entirely from the reversal of foreign currency reserves in respect of the operations in South Africa, and certain stock based compensation reserves, that were unwound upon deconsolidation.
• There were no mining or processing operations as the Business Rescue Practitioners (BRPs) successfully applied to place the three subsidiaries back into provisional liquidation on September 6, 2017 and placed the Wouterspan plant on care and maintenance.
• The three subsidiaries were again placed in provisional liquidation on September 22, 2017 by the BRPs, Metis Strategic Advisors Pty and their legal counsel Werksmans of Johannesburg, notwithstanding the fact that an offer had been received from Ascot Diamonds, an affiliate company of Diacore with a proven purchasing capability, to buy the three subsidiaries on a going concern basis at a value in excess of liquidation value, and notwithstanding that the operations were break-even for August 2017. As a result, all claims are stayed against the three subsidiaries.
• As a result, on the return date November 3, 2017 for hearing on the liquidation order, the High Court in Kimberleyordered the date to be reset to March 16, 2018 to allow a full opportunity to achieve a sale transaction and therefore a higher recovery value for creditors.
• The MD&A for the period September to November 2017 reflects a detailed account of the actions of the BRPs and the Company’s attempt to undertake this sale transaction to Ascot Diamonds.
• The provisional liquidators (PLs) appointed are Honey Attorneys of Bloemfontein, who formally took over from the BRPs on October 11, 2017.
• The buyer and their Attorneys met with the PLs several times, and now are making a detailed proposal by creditor in a comprehensive compromise proposal to the PLs.
• That purchase offer for the three subsidiaries therefore remains valid, and the PLs are in active discussion with Diacore to advance such a proposal.
• The buyer has reaffirmed its additional offer to the Company in a separate transaction to buy the three intermediate Cayman entities from the Company, although such offer is conditional on an initial successful transaction in South Africa with regards to the three South African subsidiaries. To the extent that such second offer does proceed, the Company will approach creditors and shareholders in the Company for approval.

Click here to read the full Rockwell Diamonds Inc. (JSE:RDI) press release.