Citibank notified Zale Corporation that for a fourth time, the retailer had not met the minimum volume of credit card sales required by its agreement with the bank. Zale informed its shareholders that on August 23, 2010, Citibank required a payment of approximately $396,000 prior to September 22 to cover its August sales shortfall and avoid the termination of its agreement in February 2011.
Zale paid Citibank approximately $4.1 million in June for the period that ended in February this year. The second shortfall notice covered the months of March, April and May, for which Zale paid Citibank approximately $1.1 million on July 16. Pursuant to the third notice for June and July, Zale also paid Citibank $335,000 on August 18 to cover shortfalls for those two months.
Graff Debuts Two Diamonds Over 100 Carats Each
Laurence Graff, the chairman of Graff Diamonds, recently unveiled two new diamonds — the 102.79-carat Graff Constellation Diamond and the 118.08-carat Delaire Sunrise Diamond — at the company’s annual exhibition at the Hotel de Paris in Monte Carlo.
The Graff Constellation, made from the twentieth-largest diamond ever discovered, is the largest D color, internally flawless, round brilliant diamond in the world, according to Graff. The stone was cut from the 478-carat, rough Light of Letseng, which also yielded nine other stones.
The Delaire Sunrise, named for the mountain ranges at the Delaire Graff Estate in Stellenboch, South Africa, was cut from a rare, octahedral-shaped rough by the late master cutter Nino Bianco. It is, the dimantaire said, the world’s largest fancy vivid yellow, square, emerald-cut diamond.
Harry Winston Closes Diavik Deal
Harry Winston Diamond Corporation repurchased a 9 percent indirect interest in the Diavik mine from Kinross Gold Corporation, its partner in the venture, for $220 million, bringing its stake in the mine to 40 percent. Kinross received $50 million in cash, a $70 million promissory note and approximately 7.1 million common shares in Harry Winston for the 9 percent interest. The promissory note will bear interest at a rate of 5 percent per year, with a maturity date of August 25, 2011.
Rio Tinto’s Diamond Sales Jump
Rio Tinto’s diamond unit moved to profit during the six months that ended on June 30, 2010, as global diamond market conditions improved. The company’s gross sales revenues from its diamond operations rose 77 percent year on year to $326 million through the period, helping net earnings jump to $34 million, compared against the loss of $56 million posted last year. Continued demand growth in both India and China, as well as continued restocking of the diamond supply chain, were cited as key factors contributing to the recovery.
Surat Diamond Firms Unite for Direct Sourcing
Approximately 1,500 diamond firms in Surat have come together to form a company that will purchase rough for all units in the city, reports news source Commodity Online.
The newly formed company, to be called Surat Diamond Sourcing India Ltd., will source rough stones directly from the mines in Africa, Russia, Canada and Australia, rather than having to visit Antwerp to buy rough diamonds. Until now, individual diamond units in India sourced rough from companies like De Beers, ALROSA and Rio Tinto through an auction process, and suffered whenever there was a shortage in supply or an increase in rough prices. But armed with starting capital of $2.1 million (Rs 1,000 crore) that gives it huge buying power, Surat Diamond Sourcing can buy in bulk and enjoy a 5 percent to 10 percent discount, sign long-term agreements with mine holders for continuous supply and establish direct collaboration between Surat and the diamond mines. Surat Diamond Sourcing eventually plans an initial public offering (IPO).
—Additional reporting provided by Acquire Media.
Article from the Rapaport Magazine - September 2010. To subscribe click here.