Tiffany & Co Canada threatens action over Diamcor's failure to repay loan
Diamond miner Diamcor Mining has received a Section 244 notice under the Canadian Bankruptcy and Insolvency Act, after failing to repay a C$3.51-million loan to Tiffany & Co Canada.
The Section 244 notice provides notice to Diamcor that Tiffany & Co Canada intends to enforce its security against all of the company’s present and after acquired personal property and all shares held by the company in the capital of DMI Diamonds South Africa.
TSX-V-listed Diamcor points out that Tiffany & Co Canada must give it ten days' notice of its intention to enforce a security interest prior to taking any enforcement steps.
In the meantime, the parties are exploring alternatives to the enforcement of the security.
Diamcor and Tiffany & Co Canada in December last year agreed to amend the balance of outstanding loans payable to Tiffany & Co Canada to C$2-million, payable within 90 days of signing the agreement, and a further payment of C$1.51-million, taking the outstanding balance to C$3.51-million, compared with the initial amount owing of C$6.75-million.
Tiffany & Co Canada provided the loans to Diamcor to help advance its Krone-Endora at Venetia project, in South Africa, as quickly as possible. As part of that agreement, it also secured a first right of refusal to buy up to 100% of the future rough diamond production from the mine at market prices.
The diamond industry has, however, faced a prolonged downturn in demand.
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