Overseas Diamonds Folds, Debt Estimated at $20-$25 Million

Leading diamond firm Overseas Diamonds NV is facing financial difficulties and has apparently dismissed all or part of its staff. The news about the Antwerp-based company, which has the reputation of a conservatively managed firm, sent shockwaves throughout the diamond industry.

Debts are understood to total $20-$25 million. The company’s assets are expected to cover most of this debt.

Two weeks ago, the company started dismissing employees. On Monday, the company turned in its books to the court in a process known as “deposer le bilan” - a bankruptcy petition. An appraiser was expected to arrive at the Antwerp office to start an evaluation process.

Overseas Diamonds was formed in 1974 by diamond trader Davy Lapa and in 1978 entered into diamond manufacturing. It received its first A Diamond Trading Company (DTC) Sight in 1981.

By 2002, it introduced its Isee2 technology - a device that measures the symmetry, brilliance and scintillation of ideal cut diamonds used to promote diamond sales by retailers.

The project proved to be a costly one that generated a large loss estimated at more than $25 million.

In 2007, Overseas Diamonds issued a €15 million bond loan on the Free Market of Euronext Brussels. The firm intended to use the raised funds primarily to expand its isee2 concept. The bonds carry an 8 percent annual interest rate from October 31, 2008 to October 30, 2015.

In addition to the DTC Sight, the company is a client of Rio Tinto, BHP Billiton and Alrosa, the four major diamond miners. It has a number of polishing plants and offices in Israel, Hong Kong, South Africa, China and the U.S.

Lapa was not immediately available to comment.