Johannesburg – Rockwell Diamonds on Tuesday said that the Master of the High Court has appointed interim liquidators for its three subsidiary mines in accordance with requisitions by the major creditors, but that they would not take control of the three companies as yet.
This comes after Rockwell filed a motion with the court in Kimberley on an urgent basis at the end of March to bring the date forward to consider the merits of the liquidation case brought by mining contractor, C-Rock Mining, after a judge issued an interim liquidation order. In November, the Toronto-listed Rockwell suspended operations at its Wouterspan plant following a contract dispute with C-Rock Mining.
Rockwell subsequently applied for the liquidation of its subsidiary companies and applied to the JSE to voluntarily halt trading in its equity after the Toronto Stock Exchange suspended trading in its stock pending a de-listing review.
The interim order, which has yet to be confirmed in a final hearing, includes Rockwell Resources RSA, HC van Wyk Diamonds and Saxendrift Mine in Kimberley.
The interim order was issued after a short hearing where none of Rockwell's rebuttal evidence was considered by the court. Rockwell has subsequently filed for business rescue after the date for the final hearing was brought forward to 19 April.
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The effect of a business rescue filing is that any liquidation order is automatically stayed.
If successful in its application for business rescue, a business rescue practitioner would be appointed to work with Rockwell management to restructure its affairs, seeking input and consent from creditors and well as considering strategic alternatives.
The business rescue regime does not have a directly analogous structure in Canadian restructuring practice, and is primarily aimed at enabling a company to continue trading on a solvent basis after conclusion of the business rescue process.
Rockwell said it remained persuaded that its case for dismissal of the liquidation application is sound, and after a full hearing it believes it should prevail and C-Rock Mining's actions will be shown to be spurious and without foundation.