Dominion Diamond Mines Reaches Agreement to Sell Ekati Mine, Canada
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Dominion Diamond Mines have settled an asset purchase agreement with DDJ Capital Management and Brigade Capital Management, both investment managers to holders of the company’s second lien notes.
Under the agreement, an entity to be controlled by the purchaser would acquire substantially all of Dominion’s assets, excluding Dominion’s joint venture agreement and liabilities relating to the Diavik Mine, in consideration for the assumption by the purchaser of various liabilities owing to Dominion’s creditors, employees, suppliers, and surety bond holders, and the provision of a US$70 million working capital facility. This capital is intended to fund the post-closing satisfaction of certain assumed liabilities, operations at the Ekati Mine, and for general working capital purposes.
On April 22, 2020, Dominion filed for insolvency protection under the Companies’ Creditors Arrangement Act (CCAA) and obtained an order from the Alberta Court of Queen’s Bench granting Dominion protection under the CCAA.
Details on Proposed Transaction
Under the terms of the agreement, the purchaser will purchase from Dominion substantially all of its assets, excluding Dominion’s joint venture agreement and liabilities relating to the Diavik Mine, in exchange for the Purchaser (i) assuming US$70 million of Dominion’s outstanding indebtedness under its revolving credit Agreement. (ii) assuming indemnity and related obligations under Dominion’s surety bonds in the face amount of CND$279 million. (iii) permitting the working capital facility to be utilized to satisfy cure cost payments to certain trade creditors of Dominion at the closing of the proposed transaction. (iv) assuming various additional pre-filing liabilities related to the company’s employees.
Upon completion of the Proposed Transaction, Dominion expects the ongoing business to pay or otherwise satisfy, among other things, obligations to certain stakeholders, including:
• Dominion’s employees, including pension obligations
• Governmental authorities, including reclamation obligations at Ekati
• Dominion’s Impact Benefit Agreement partners and other Indigenous groups and Northern communities
The company has agreed to take all action reasonably necessary or appropriate to restart operations at the Ekati Mine as soon as possible, and no later than January 29, 2021.
About Dominion Diamond Mines
Dominion Diamond Mines is a Canadian mining company and one of the world’s largest producers and suppliers of premium rough diamond assortments to the global market. The company owns a controlling interest in the Ekati Diamond Mine, which it operates, and owns 40 percent of the Diavik Diamond Mine. The company also holds a controlling interest in the Lac de Gras Diamond Project. The Ekati and Diavik Diamond Mines, and the Lac de Gras Diamond Project are located in the Northwest Territories of Canada. In addition to its mining and exploration operations, Dominion has offices in Canada, Belgium, and India.
To stop by Dominion Diamond Mines’ website, CLICK HERE
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