Rockwell files for business rescue

Rockwell Diamonds, which is suspended from trade in Johannesburg and Toronto, has filed for business rescue to stave off attempts by a contractor to liquidate the company.

Rockwell Diamonds, which is suspended from trade in Johannesburg and Toronto, has filed for business rescue to stave off attempts by a contractor to liquidate the company.

A Kimberley court awarded an interim liquidation order against Rockwell in March.

Rockwell, which said the judge had not considered its arguments in the liquidation case brought against its three subsidiaries by C-Rock Mining, has asked that the final hearing set down for June be brought forward on an urgent basis.

“The interim order was issued after a short hearing where none of the company’s rebuttal evidence was considered by the court,” it said.

“The company remains persuaded that its case for dismissal of the liquidation application is sound and after a full hearing it believes it should prevail and C-Rock Mining’s actions will be shown to be spurious and without foundation,” Rockwell said.

Interim liquidators had been appointed but had not taken over any management roles, the company said.

To prevent the liquidation, Rockwell’s management has filed an application to put the company into business rescue and give its turnaround strategy a chance of success.

“If successful in its application for business rescue, a business rescue practitioner will be appointed to work with company management to restructure the affairs of the company, seeking input and consent from creditors as well as considering strategic alternatives,” Rockwell said.

Rockwell said nearly all its creditors supported the turnaround strategy.

The plan included an $8m injection to complete the new Wouterspan processing plant, selling assets, paying all creditors owed R50,000 or less and buying supplies with cash only.

“The implementation of this business plan is well advanced despite the frustrating intervention by C-Rock Mining,” it said.