Rescue Package for Troubled Dominion Diamond Mines

(IDEX Online) - Dominion Diamond Mines is to sell its assets to avoid bankruptcy, recall is furloughed workers and resume operations.

The troubled Canadian company, which has been in creditor protection since April, has reached an agreement with The Washington Companies, which will acquire its assets for $126m and assume responsibility for most of operating liabilities.

The privately held conglomerate, based in Montana, USA, bought bought Dominion for $1.2 billion in 2017.

The deal provides Dominion with a $60m cash injection that will allow it to meet its financial obligations and start production again at its Ekati mine, in Northwest Territories, Canada.

Dominion, the world's third largest producer of rough diamonds by value, has signed a memorandum of understanding and the deal should be completed in 90 to 120 days.

Dominion also has a minority 40 per cent joint venture stake in the Diavik mine, in Northwest Territories.

A judge ruled last week that majority holder DDMI, a Rio Tinto subsidiary, could withhold some diamonds until Dominion pays its share of operating costs.