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Dominion Seeks Rescue Deal to Avoid Liquidation
Oct 28, 2020 6:30 AM
By Rapaport News
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RAPAPORT... Dominion Diamond Mines may have to enter liquidation if it fails to find a buyer or investor, chairman Brendan Bell warned in a court filing last week.
The company has been seeking restructuring options after its planned sale of the Ekati deposit in Canada collapsed earlier this month, Bell said in an October 23 affidavit. The best outcome would be one that saves the Ekati mine and preserves its benefits for society, such as jobs and tax revenue, he noted.
“That said, absent a purchaser for Dominion’s [assets] or an investor prepared to make an equity injection in the near term, there is a real possibility that Dominion will not be able to avoid liquidation,” the executive continued. “Dominion is therefore considering all options in the interests of its stakeholders generally.”
Dominion also asked the Alberta court to extend the miner’s protection from creditors until December 15 so it can continue discussions over a restructuring deal. The period was scheduled to end on November 7.
Affiliates of Dominion’s owner, the Washington Companies, were due to buy Ekati for $126 million. However, the transaction fell through after talks between the buyer and insurers over restoration costs reached an impasse. Dominion CEO Patrick Merrin later resigned to focus on his position as Washington’s chief operating officer.
Image: Rough diamonds. (Dominion Diamond Mines)
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Tags:
Alberta, Brendan Bell, Dominion, Dominion Diamond Mines, ekati, Ekati mine, liquidation, mining, Patrick Merrin, Rapaport News, Rough Diamonds, Washington Companies
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