Tiffany's Threat to Seize Diamcor Assets over $2.4m Debt
June 17, 25
(IDEX Online) - Tiffany & Co is threatening to take control of assets belonging to the Canadian miner Diamcor, after it failed to repay a debt of CAD 3.5m (USD 2.4m).
Under a long-term strategic alliance, Tiffany had the option to buy all Diamcor's future rough diamond production at market prices, in exchange for financing the expansion of its Krone-Endora at Venetia project, in South Africa.
But Diamcor was unable to repay a CAD 6.8m (USD 4.7m) loan. Tiffany reduced it last December to CAD 3.5m (USD 2.4m) because of weak market conditions.
Diamcor was supposed to pay the first installment within 90 days and the second a year later.
As a result of Diamcor's non-payment, Tiffany has issued a section 244 notice under the Canadian Bankruptcy and Insolvency Act.
Unless Diamcor complies within 10 days (from 13 June), Tiffany will be able to claim Diamcor's property and shares in its subsidiary DMI Diamonds South Africa as payment for the debt.
Both parties are currently exploring alternatives to enforcement, and discussions are ongoing to resolve the situation without asset seizure.