22 April 2020
Dominion Diamond Mines ULC announced today that it and certain of its affiliates (collectively, “Dominion” or the “Company”) have filed for insolvency protection under the Companies’ Creditors Arrangement Act ("CCAA") and obtained an order from the Alberta Court of Queen’s Bench (the "Court") granting Dominion protection under the CCAA. Dominion intends to use the CCAA process to engage in discussions with its lenders, creditors, equity owner and other stakeholders and to solicit and evaluate strategic alternatives to restructure the Company financially and operationally, and position it for long-term success when global economic and industry conditions improve.
Dominion has received and is considering a proposal from an affiliate of The Washington Companies, Dominion’s current equity owner, to provide debtor-in-possession (“DIP”) financing, which would help provide sufficient liquidity through the CCAA process. This proposal is conditional upon Dominion agreeing to: (i) a Memorandum of Understanding (MOU) regarding a possible sale of its assets to an affiliate of The Washington Companies, as a stalking horse bidder; and (ii) bidding procedures for the solicitation of competing offers to such asset sale, either to purchase the Company’s assets or to make an investment in the Company. If the Washington proposal is agreed to by Dominion, the DIP financing, MOU for an asset sale and bidding procedures will be subject to approval from the Court with notice to interested parties.
The Washington Companies proposes in the MOU for an asset sale that its affiliate will pay or otherwise satisfy, among other things, all obligations to employees and governmental authorities (including reclamation obligations) and all obligations under the Company’s agreements with the First Nations and aboriginal groups. The proposed asset sale would be a stand-alone bid that would operate as a “floor bid” as part of a competitive process to maximize value for Dominion’s stakeholders. Dominion is reviewing the proposal with its advisors and is engaged in discussions on the terms. The proposal is subject to various contingencies, including due diligence.