Two Parties Interested in Buying Dominion

RAPAPORT… Two companies have expressed interest in acquiring Dominion Diamond Mines, according to an affidavit by its former CEO Brendan Bell.

Those parties, who were not named in the June 12 legal filing, have signed non-disclosure agreements that entitle them to review confidential information on Dominion’s financials. The process could result in either company making a bid for some or all of the miner’s assets, according to Bell, who is acting as an independent adviser to the court during the proceedings.

The development follows a stalking-horse bid that its current owner, the Washington Companies, made to establish a low-end bidding figure that each successive bid must beat.

Only “a limited number of potential purchasers” would be interested in buying and operating Dominion, given the challenging diamond market and the difficulties at Ekati, Bell also stated in the documents. Mining at the site is hard because of the Northwest Territories’ subarctic climate and the challenges of receiving fair value for diamonds, Bell explained. 

Dominion’s creditor protection has been extended until September 28, according to the latest report filed by the monitor in charge of the restructuring. The Canada-based miner has until July 20 to collect non-binding letters of intent from any bidders interested in purchasing its assets, and until September 7 to select a successful bid. If Dominion receives and agrees to a viable offer, it must close the deal by the end of October.

Dominion filed for insolvency protection in Canada’s Alberta Court of Queen’s Bench on April 22, stating it was having difficulty paying bills and maintaining operations amid the coronavirus pandemic.

The miner did not respond to a request for comment from Rapaport News.

Image: The Ekati mine. (Dominion Diamond Mines)