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Dominion Finds Buyer for Ekati
Dec 8, 2020 4:55 AM
By Rapaport News
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RAPAPORT... Dominion Diamond Mines has reached a deal to sell its Ekati mine in Canada to two of its bondholders amid mounting debt that caused it to seek creditor protection.
DDJ Capital Management and Brigade Capital Management will acquire nearly all of Dominion’s assets, with the exception of its 40% stake in the Diavik mine, which it shares with joint-venture partner Rio Tinto, Dominion said Monday.
Under the terms of the agreement, which is subject to court approval, the buyers will assume $70 million of Dominion’s debt from its revolving credit facility. They will also cover a number of Dominion’s liabilities, including employee pension plans and money owed to suppliers, unions, indigenous groups and the government of the Northwest Territories. However, the buyers will not take on any portion of Dominion’s outstanding principal of $550 million owed on its senior secured bonds.
Meanwhile, DDJ and Brigade will provide Dominion with $70 million in working capital, with operations at Ekati due to resume no later than January 29, Dominion noted. The company recalled approximately 60 of its furloughed workers this month in preparation for the restart.
The miner filed for bankruptcy protection in April after encountering difficulties paying its debtholders and selling its diamonds amid the coronavirus pandemic. In October, a $126 million proposed sale of Ekati to affiliates of Dominion’s parent, the Washington Companies, fell through after the buyer failed to agree on an arrangement with insurers.
The new buyout deal is set to close by February 1. Dominion’s current creditor protection will expire on December 15. The company has asked the court for an extension until March 1 to see the deal completed.
Image: An aerial view of the Ekati mine. (Dominion Diamond Mines)
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Tags:
Brigade Capital Management, DDJ Capital Management, Diavik, Diavik mine, Dominion, Dominion Diamond Mines, ekati, Ekati mine, Rapaport News, Rio Tinto, The Washington Companies
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