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RAPAPORT... Rockwell Diamonds Inc. extended and amended its $2 million convertible loan agreement with principal shareholder, Daboll Consultants Ltd. The addendum also extends the current diamond marketing and beneficiation agreements with Daboll's affiliate, Steinmetz Diamonds, until 2018.
The loan agreement originated on June 2, 2011, and the repayment date was extended by two years to June 2, 2015. Additionally, the conversion right has been amended so that the loan is convertible at the prevailing market price of the company's shares over its two-year remaining term with a floor price of 16 cents per share. Other provisions stated that the loan may be converted into no more than 10 percent of the company's share capital as of the date of conversion, unless a larger number of shares has been authorized by a prior vote of disinterested Rockwell shareholders.
Rockwell has agreed to solicit disinterested shareholder approval at its July 26 annual and special shareholders meeting.
"This extension reinforces our long-standing partnership with Steinmetz Diamonds, both as our strategic marketing partner and Rockwell's largest shareholder," said James Campbell, Rockwell's CEO. "The strength of this partnership stems from our unique positioning in the diamond industry: Rockwell produces large, high-valued investment diamonds, and Steinmetz Diamonds focuses on beneficiation and sales in this segment. The majority of our production profile comprises the rare investment-grade rough diamonds that Steinmetz Diamonds is renowned for polishing and marketing at the high-end. Both parties have derived significant value from this partnership to date, and we are confident that it will continue to add value going forward."
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