As previously advised, Namibian Minerals Corporation (NAMCO) has placed some of its South African subsidiary companies into provisional liquidation under the laws of South Africa. This provisional winding up order becomes final in approximately six weeks. Several Namibian subsidiary companies were also placed into provisional liquidation today under the laws of Namibia.
Under South African and Namibian law, provisional liquidation means that the subsidiary companies’ assets and liabilities are controlled by a provisional liquidator.
As a consequence, all diamond mining operations have ceased. Provisional liquidators of the South African subsidiaries have been appointed by the South African court and it is now the provisional liquidators’ decision as to whether they will continue to operate any part of the business. Apart from the operations conducted by the subsidiaries which are now in provisional liquidation, the company conducts no other operations.
The decision to file for provisional liquidation follows the disruption to operations by the accident to the company’s NamSSol mining system in January and the resultant cash flow impact on the company’s finances. Cash resources were already affected by lower production in 2000 and high capital expenditure.
There is a period of approximately six weeks before the provisional liquidation becomes final. During this time, the company has the opportunity to reverse provisional liquidation by obtaining sufficient financing for its subsidiary companies, reaching agreement with the creditors, and obtaining consent from the courts of South Africa and Namibia where necessary.
The company is continuing to attempt to negotiate financing arrangements with its lenders on terms which will be acceptable not only to its lenders but also to its potential investors. It is hoped that resolution can be achieved and additional finance can be raised prior to the provisional winding up order becoming final, but no assurances can be given.
The company has requested the Toronto Stock Exchange, Nasdaq and Namibian Stock Exchange to suspend trading in its shares indefinitely.
“We are extremely concerned by the impact this has on our stakeholders, and the hardship it brings to our people and to our creditors. We are doing everything possible to turn around the situation,” said Alastair Holberton, chairman and chief executive officer.
The company will continue to provide updates on developments.
