Namco creditors approve restructuring (July 23, 2001)

Creditors of Namibian Minerals (NMR-T) have approved a plan of arrangement that will bring the company’s subsidiaries out of provisional liquidation, leaving it to the South African courts to give final approval to the company’s bail-out.

Namco put a number of its South African and Namibian subsidiaries in provisional liquidation in February, after a January accident with the company’s NamSSol sea-floor excavator left the company with severely restricted cash flow. It received an infusion of US$15 million from the Israeli diamond trading house Leviev Group in March and resumed underwater mining in April.

Subsequent private placements raised US$12 million for the company, and the Namibian subsidiaries were discharged from bankruptcy proceedings in May. Namco has filed a prospectus required to issue the shares, and US$2 million in convertible debentures, and expects to close that deal before the July 20 deadline for issuing the shares and the Aug. 28 deadline for issuing the debt notes.

Offshore operations during the second quarter were affected by the company’s financial difficulties, which slowed repayment arrangements with its trade creditors. Diamond production in the quarter reached 13,755 carats, but management is expecting much better results over the remainder of the year.