Mountain Province Diamonds Inc. intends to hold a special meeting of shareholders on September 29, 2020. The Special Meeting is being called to enable the Company's shareholders to approve two related party transactions that will significantly strengthen the Company's financial position as it responds to the challenges posed by the COVID-19 pandemic.
At the Special Meeting, the Company will seek approval for the assignment from the existing lenders to Dermot Desmond, or a related company, of the Company's indebtedness of $25,000,000 under its senior secured revolving credit facility.
The Company will also seek approval at the Special Meeting for an increase from $50,000,000 to $100,000,000 in the sales capacity under the previously announced diamond sales agreement between the Company, certain of its subsidiaries and Dunebridge Worldwide Ltd. This will allow the Company to continue selling its run of mine diamonds at the prevailing market price, and potentially share in the future upside should the traditional sales channels for rough diamonds remain closed or subdued. Dunebridge is controlled by Dermot Desmond, an insider and related party of Mountain Province.
Stuart Brown, the Company's President and CEO, commented: "The impact of the COVID-19 pandemic on the diamond industry and, in turn the Company has been profound. The support shown by Desmond and the subsequent finalisation of the Transactions will be a substantial positive step in stabilising the Company and brings more certainty to its future. In particular, the US$50,000,000 increase of the sales agreement allows the Company the flexibility to sell its diamonds under the agreement or through the traditional sales channels as they begin to open after the summer holidays."
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished
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