0% Rockwell's pressing need for funds
Brendan Ryan | Fri, 26 Jun 2009 20:45[miningmx.com] -- RESULTS released today by Rockwell Diamonds for the year to end-February show the company is in a perilous financial situation and must swiftly raise C$4m to stay in business. Rockwell lost C$13m in the year to end-February and that, combined with the further losses sustained since then, is sufficient to cast doubt on the company’s ability continue as a going concern. The numbers were published nearly four weeks behind schedule. In addition to its operating problems caused by the grim state of the rough diamond market Rockwell has just been through a bruising battle for control of the board. Shareholders last week voted down a proposal from Swiss investment group Pala to remove chairman David Copeland, CEO John Bristow and director Mark Bristow from the board. They also rejected a proposal by Pala to scrap Rockwell’s shareholder rights protection plan. Rockwell’s directors commented that, “although the company has reduced costs substantially, sales of diamonds have also decreased. "The risk that cash and working capital will not be sufficient to fund the continuing losses indicates that a material uncertainty exists which may cast substantial doubt on the ability of the company to continue as a going concern.” Despite this situation Rockwell’s directors said they believed the company would be able to continue as a going concern during the financial 2010 year. Their main reason for this was that the latest cash flow forecasts indicated another C$4m was needed and plans were under way to raise that money. The directors said the process towards holding either a rights offer or a private placement has been started. They also pointed out Rockwell’s total assets exceeded its total liabilities by C$70.4m but warned that, should the C$4m not be raised, then the company and its subsidiaries “may be unable to realize their assets and discharge their liabilities in the normal course of business. “
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