Dominion Diamond Mines has been granted a safety order after submitting for insolvency safety, the corporate introduced Wednesday in a press launch.
Based on the discharge, the corporate and a few of its associates “have filed for insolvency safety beneath the Firms’ Collectors Association Act (CCAA)” and has acquired an order from the Alberta Court docket of Queen’s Bench granting safety to the corporate beneath the act.
“Dominion intends to make use of the CCAA course of to interact in discussions with its lenders, collectors, fairness proprietor and different stakeholders and to solicit and consider strategic options to restructure the corporate financially and operationally, and place it for long-term success when international financial and trade circumstances enhance,” the press launch states.
Dominion Diamond is the controlling proprietor of the Ekati Diamond mine, and is a 40 per cent accomplice with Rio Tinto PLC within the Diavik Diamond mine — each within the Northwest Territories, roughly 300 kilometres northeast of Yellowknife.
Operations on the Ekati mine have been suspended since March 19 in gentle of the COVID-19 pandemic, whereas manufacturing at Diavik continues.
Dominion Diamond owes its collectors $550 million. That invoice is due in 2022. Credit score companies had been already skeptical that it might truly pay this off.
Seattle-based Washington Firms is the fairness proprietor of Dominion Diamonds and, in accordance with the press launch, has provided to offer enough money to see the corporate by way of the CCAA course of. In trade, Dominion Diamond would conform to a memorandum of understanding relating to the sale of its belongings to a Washington Firms affiliate.
The corporate shouldered the speedy explanation for its monetary issues on the COVID-19 outbreak.
“The CCAA submitting was necessitated primarily by the affect of the COVID-19 pandemic,” states the press launch.
“Though the corporate has sturdy diamond stock, sorting homes and diamond markets are closed. These are key channels to facilitate the sale of the corporate’s stock, so at the moment there isn’t a capability to generate enough income to help Dominion’s ongoing monetary obligations.”
The corporate states that it expects to return the Ekati mine to operation as soon as the pandemic eases and diamond markets reopen.
“Dominion continues to imagine within the long-term viability of its belongings and expects to emerge stronger and higher capable of ship worth to all stakeholders.”
FTI Consulting Inc. is the court-appointed CCAA proceedings monitor.