DiamondCorp retrenches all employees

DiamondCorp, the Southern African diamond mining, development and exploration company, announced the update on discussions with the Industrial Development Corporation of South Africa ("IDC") and the Association of Mining & Construction Union ("AMCU") were held.

Further to the announcement of 28 February 2017, discussions between AMCU and the Business Rescue Practitioner ("BRP") under the supervision of the South African Commission for Conciliation, Mediation and Arbitration terminated without a settlement on a collective agreement to allow care and maintenance to commence. Consequently, ‘effective April 3rd all employees will be retrenched’, the company noted.

Due to the retrenchment, the senior secured status necessary for the effectiveness of the post commencement finance pursuant to the IDC Agreement (as announced on 28 February 2017) is no longer available for new funding, as in a liquidation priority is given to amounts due relating to employment.

Following discussions with the major affected parties, LDM has appointed Lebogang Mpakati of Independent Advisory (Pty) Ltd as joint Business Rescue Practitioner, alongside Daniel Terblanche of Deloitte & Touche.

The Board of DiamondCorp has advised the BRP and the IDC that unless there is an accelerated plan and route for funding in place which can be completed by mid-May 2017, including a significant restructuring of all debt, and successful exit from the Business Rescue process, then it is likely that the Group would need to be placed into administration.