Rockwell succeeds in having subsidiaries placed in business rescue

JOHANNESBURG (miningweekly.com) – An application to have Rockwell Diamonds’ three subsidiaries placed under business rescue, as opposed to liquidation, has been granted by a court in Kimberley.

C-Rock Mining (CML) had previously applied to have the three subsidiaries – Rockwell Resources, HC van Wyk Diamonds and Saxendrift Mine – placed in interim liquidation.

The immediate effect of last week’s court judgment is that all legal proceedings against the subsidiaries are stayed and that the liquidation process is suspended.

Rockwell will also now pursue criminal and civil claims against CML and certain individuals involved in the business of CML.

“The orders placing the subsidiaries in business rescue support our contention that there is a reasonable prospect of rescuing the subsidiaries and restoring them to long-term profitability,” Rockwell said in a statement.

Joint business rescue practitioners (BRPs) Peter van den Steen and Trevor Murgatroyd of Metis Strategic Advisors have been appointed to oversee the affairs of the subsidiaries, work alongside dual-listed Rockwell’s management to right the businesses of the subsidiaries, and prepare a business rescue plan aimed at ensuring a return to commercial operations.

The BRPs have been appointed by the court on an interim basis, subject to ratification by creditors within the next ten business days. They will be in contact with the creditors of the subsidiaries in the next week to make the necessary arrangements.

In addition, the BRPs will work with management to review and refine the current business plan and assess whether there are further opportunities for optimisation and implementation of the plan, and report progress to the creditors.

The strategy remains the completion of the ramp-up of Wouterspan mine to full production and to assess where feasible measures to further increase production can be implemented.

A strategic review of all assets and opportunities will be conducted to assess possibilities of realising short-term value, which may assist in expediting the repayment of creditors, and to ensure the businesses have sufficient capital to return to normal commercial operations where required.