Corporate Update

RNS Number : 1936R

BlueRock Diamonds PLC

27 February 2023

 

BlueRock Diamonds PLC / AIM: BRD / Sector: Natural Resources

27 February 2023

BlueRock Diamonds PLC ('BlueRock' or the 'Company')

Corporate Update

BlueRock Diamonds Plc (BRD), the AIM listed diamond producer, which owns and operates the Kareevlei Diamond Mine in the Kimberley region of South Africa, announces a corporate update following the  suspension in trading in the Company's shares announced on 24 February 2023.

Corporate Update

The indebtedness of the Company's principal operating subsidiary, Kareevlei Mining Proprietary Limited ("Kareevlei"), to Teichmann South Africa ("TSA") has increased to ZAR 75.5 m (c. £3.4m) as at 10 February 2023 after a payment to TSA in early February. Subsequent to this, TSA submitted a demand for payment of the outstanding balance and then a request that Kareevlei, amongst other requests, consent to TSA perfecting its security held via two Notarial Bonds over the assets and an undertaking that Kareevlei would not be placed in business rescue prior to the bonds being perfected. These requests were not acceded to and  on 22 February 2023 TSA exercised its security over the Kareevlei bank account with the result that the account may not be used by Kareevlei.

The Board of Kareevlei, as part of its deliberations on the sustainability of Kareevlei, commissioned a team of independent specialists to advise on the updated mining plan, future, and financial forecasts for Kareevlei. After reviewing the Report of the specialists in conjunction with the creditor position, in particular its debt in excess of the terms of the TSA Facility, the Board of Kareevlei resolved to place Kareevlei into voluntary business rescue ("Business Rescue") so as to afford time to assess the actions which should be taken with respect to Kareevlei as well as the time to implement these so as to achieve the best outcome for all stakeholders and affected persons. Business Rescue affords the Company protection from legal action while its future is assessed and potential plans to rescue the business are implemented. Kareevlei has engaged with a reputable Business Rescue practitioner, Engaged Business Turnaround Proprietary Limited ("EBT"), to assist Kareevlei with this process. On 24 February 2023 Kareevlei was advised that its application for Business Rescue had been received and approved by the relevant Regulatory Authorities in South Africa and is now awaiting formal registration of EBT as its Business Rescue practitioner. It is anticipated that this will occur during 27 February 2023.

The Board of BlueRock was notified on 24 February 2023 that TSA had lodged an urgent application in the Kimberley High Court for the perfection of the security which it holds and was notified by the Board of Kareevlei that it had applied for Business Rescue and was awaiting final approval of its selected Business Rescue practitioner, and that the nominated business rescue practitioners are Warren Richard Castle and Ian Fleming of EBT.

The Board of Kareevlei engaged with the nominated EBT, TSA and TSA's legal advisors to secure essential payments, and payments were made to staff for February salaries and to the diesel supplier for diesel on Friday afternnon.

The Company is engaging with its advisors, including in South Africa, on the action to be taken by Company and notes that as of 25 February 2023 the Company held cash in the UK of approximately £ 92,000. The Board intends to consult with UK insolvency practitioners in respect of potential courses of action for BlueRock during the course of Monday 27 February 2023.

Further announcements will be made in due course as appropriate.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ('MAR'). Upon the publication of this announcement via Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.

**ENDS**

For further information, please visit BlueRock's website www.bluerockdiamonds.co.uk or contact:

BlueRock Diamonds Victor Dingle, CEO	[e-mail]
SP Angel (NOMAD and Broker) Stuart Gledhill / Harry Davies-Ball	Tel: [phone]
St Brides Partners Ltd (Financial PR) Isabel de Salis / Paul Dulieu	[e-mail]

 

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