Don't hold your breath on a NAMCOdeal soon....
Friday, February 28, 2003 - Web posted at 9:24:00 GMT
Namco's winding-up extended
WERNER MENGES
THE final liquidation of diamond mining companies Namco
Namibia and Island Diamonds has been postponed.
At the request of their legal representatives, the High Court in
Windhoek this week extended the provisional liquidation of the
two companies to March 10.
Both belong to the once-promising Namco group of companies.
At the same time Judge Sylvester Mainga granted permission to
the liquidators of the two debt-crippled companies to borrow
more money to keep them afloat.
According to liquidator Ian McLaren, it costs some N$80 000 a
month to meet the companies' continuing expenses.
This includes leasing business premises where diamonds still
in the companies' possession are kept in a vault, paying the
salaries of personnel still required on the premises and meeting
expenses such as municipal bills and telephone accounts.
McLaren said in an affidavit that neither Namco Namibia nor
Island Diamonds has cash resources available at present.
Namco however still possesses 3 190 carats of diamonds,
representing about a week's production, plus some stockpiled
ocean gravel which might contain more diamonds.
Island Diamonds has some 2 229 carats of diamonds
stockpiled, McLaren indicated in the statement.
The Namibian Government Diamond Valuator has valued the
diamonds still held by Namco Namibia at some N$2,6 million,
while the gemstones belonging to Island Diamonds have been
valued at some N$2,01 million, according to McLaren.
He indicated that the liquidators wanted to be allowed to sell the
stockpiled diamonds at a price that would not be below these
official valuations.
Except for these assets the companies' other principal assets
consist of mineral rights and geological information, McLaren
said.
However, as soon as a final liquidation order is granted, their
mineral rights will lapse and the geological information will
become public, McLaren stated.
He said the provisional liquidation had already been extended
as the liquidators were negotiating a possible sale of these
mineral rights, including the geological information.
Namco Namibia's application to be allowed to borrow a further
N$230 000 from the Commercial Bank of Namibia, and Island
Diamonds' application to be permitted to borrow another N$200
000 from the same bank, were not opposed.
However, Israeli-based LLD Diamonds, with which the Namco
Group had concluded an exclusive marketing agreement, has
already given notice to the High Court that it will oppose an
application for the final liquidation of Namco Namibia.
When Namco Namibia and Island Diamonds applied to the High
Court for a provisional liquidation order in mid-December, the
Namco Group's Chief Financial Officer, Eliezer Nefussy, told the
court the group owed a group of banks, including the
Commercial Bank of Namibia, some US$50 million (about
N$402 million at current exchange rates).
At the time the group also owned an affiliate of LL Diamonds, LL
Mining Corporation BV, some US$12,6 million (N$101 million at
the current US$/N$ exchange rate).
LLMC helped rescue the cash-strapped Namco Group from
liquidation in mid-2001.
It pumped some US$27 million into the group, becoming its new
main shareholder.
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