Executive Directors Select HaywoodExecutive Directors Select Haywood Securities to Provide Standby Commitment for Fair Rights Offering
- On Thursday June 11, 2009, 8:30 am EDT
VANCOUVER, June 11 /CNW/ - The Executive Directors of Rockwell DiamondsInc. (TSX: RDI; JSE: RDI; OTCBB: RDIAF) today announced the Company hasentered into a letter agreement with Haywood Securities Inc. ("Haywood") toact as dealer manager and to provide a standby commitment, often referred toas a "back-stop", for the planned Fair Rights Offering. Under the terms of aletter agreement signed today, Haywood will back-stop the rights offering to amaximum of C$3.6 million. The rights exercise price will be determined in thecontext of the market subsequent to the June 17, 2009 shareholders meeting.The Haywood offer is subject to Rockwell board approval and subject to PalaInvestments Holdings Limited's initiatives not succeeding at the June 17meeting. Under the terms of the offer Haywood would, for a fee of under 2% ofthe amount back-stopped, manage the rights offering of up to 60 million sharesand will exercise any rights not subscribed for by existing Rockwellshareholders.
The Fair Rights Offering does not require compromise of the ShareholdersRights Plan and therefore no shareholder can use the rights offering to cementcontrol above 20%. Haywood's letter offer is subject to definitive agreementscontaining customary conditions, termination rights and regulatory approval.
"We are very pleased to have the support of Haywood for the Fair RightsOffering," commented David Copeland, chairman and one of the ExecutiveDirectors. "While I am confident that this Rights Offering will be heavilysubscribed by current shareholders who will want to maintain their equityposition, we are pleased that we will have the funds in place in about eightweeks after the shareholders meeting. We believe the recent market volume andprices are indicative of a recognition that Rockwell's shares areundervalued."
"Proceeds of the Fair Rights Offering will provide operationalflexibility until average diamond prices recover further and it will do sowhile maintaining the Shareholder Rights Plan," added Mr Copeland. "Marketanalysts have recently confirmed that in their view terminating theShareholder Rights Plan, as proposed by Pala, is not in the best interests ofall shareholders."
The Executive Directors of Rockwell have established a purpose-specificweb site where additional information, including the Executive Directors'Information Circular and Proxy, is available to shareholders relating to theissues concerning the Special Meeting at www.executivedirectorsrockwell.com.
THE FUTURE OF ROCKWELL DIAMONDS INC. WILL BE DETERMINED
BY THE OUTCOME OF THIS VOTE. DO NOT ALLOW A DISSIDENT MINORITY
SHAREHOLDER TO TAKE CONTROL OF ROCKWELL AND YOUR INVESTMENT.
THE EXECUTIVE DIRECTORS URGE YOU TO
VOTE ONLY THE GREEN PROXY
AS RECOMMENDED ON THE GREEN PROXY
For further information, contact:
The Laurel Hill Advisory Group by email at rockwellinfo(at)
laurelhillag.com or by phone at:
Toll free Or Collect
North America 1-888-882-6737
Europe 00-800-8655-1111 1-416-637-4661
South Africa 0-800-982-179
The comments of the Executive Directors in this news release and on thewebsite are solely their own and not of any other director. For generalinformation about Rockwell please visit its own website at
www.rockwelldiamonds.com or contact Investor Services at (604) 684-6365 orwithin North America at 1-800-667-2114. Investor Services deals with Companyinformation and is not authorized to discuss matters or answer questionsrelating to the contested special shareholders meeting. Questions relating tothe Executive's Director's positions in respect of the Meeting should bedirected to Laurel Hill Advisory Group as per above.
No regulatory authority has approved or disapproved the information
contained in this news release.