BlueRock Diamonds PLC - In Administration / AIM: BRD / Sector: Natural Resources

28 July 2023

BlueRock Diamonds PLC - In Administration ('BlueRock' or the 'Company')

Proposal to Creditors

Stepping down of nominated adviser

BlueRock announces that Allister Manson and Trevor John Binyon, the Joint Administrators of Bluerock Diamonds Plc, have published proposals (the "Proposals") to creditors and members as required by Rule 3.55(10) of the Insolvency (England and Wales) Rules 2016. The Proposals have been made available to creditors via the Opus Restructuring online creditor portal and have been filed at Companies House. Material information for shareholders has been highlighted below.

The Joint Administrators were originally pursuing the first statutory objective of rescuing the Company as a going concern via a Company's Voluntary Arrangement ("CVA"). However, following significant correspondence with the proposed purchaser of the Company's shares in Kareevlei Mining Pty Ltd, the CVA process is now not being pursued. Therefore, the Administrators will now be pursuing the alternative objective of making a distribution to the preferential creditors, with a subsequent exit route of dissolution.

Events since the Joint Administrators' appointment

Immediately upon appointment, the Joint Administrators undertook a review of the Company's affairs with particular regard to its financial and resource requirements. This assessment was carried out in liaison with the remaining management of the Company.

The Joint Administrators propose to sell the Company's assets to a party connected with the Company. The Joint Administrators are yet to complete the marketing process for these assets and therefore, no formal offers have been received to date. However, interest has been received from a connected party for the purchase of the subsidiary shares held that will need to be discussed in line with any other offers that might be received.

In accordance with the requirements of Statement of Insolvency Practice (England & Wales) 13, details of the sales of assets to parties connected with the Company since the Joint Administrators' appointment will be detailed in the next available report to creditors following the completion of the sale.

The Joint Administrators will shortly instruct an independent valuation and asset agent, who will have professional independent agents with adequate professional indemnity insurance, and will dispose of the Company's assets using the most advantageous method available. Further detail and information will be provided in the next available report following any completed sales.

Other steps taken as regards assets

The Joint Administrators made immediate contact with the Company's bankers in order to freeze the Company's bank accounts and to request the transfer of any credit balances to the Joint Administrators' control.

Prior to the appointment, the Company transferred £33,000 to the Opus Restructuring Client Account to protect the funds and to have funds on account at the date of appointment. These funds have now been transferred into the Administration estate bank account.

Summary of the Joint Administrators' Proposals

In order to achieve the purpose of the Administration, the Joint Administrators formally proposed to creditors that:

·    The Joint Administrators continue to manage the business, affairs and property of the Company in order to achieve the purpose of the Administration;

·    The Joint Administrators make distributions to any secured or preferential creditors in accordance with Paragraph 65 of Schedule B1 of the Act. Further, they may make a distribution to unsecured creditors, having first sought the court's permission in accordance with Paragraph 65(3) of Schedule B1 of the Act where necessary;

·    The Joint Administrators end the Administration in one of the following ways, appropriate to the circumstances of the case at the time:

o  in the event that the Joint Administrators think that the purpose of the Administration has been sufficiently achieved and that control of the Company should be returned to the Company directors, they shall exit the Administration by a CVA process, and at the end of the CVA period hand the Company back to the directors.

o  However, in the event that the Joint Administrators think that a distribution will be made to unsecured creditors (and they have not sought the court's permission, and are otherwise unable, to pay the distribution whilst the Company is in Administration), they shall send to the registrar of companies notice to move the Company from Administration to Creditors' Voluntary Liquidation. In such circumstances, Allister Manson and Trevor John Binyon will be appointed Joint Liquidators and will be authorised to act either jointly or separately in undertaking their duties as Liquidator. Creditors may nominate a different person or persons as the proposed liquidator or liquidators in accordance with Paragraph 83(7)(a) of Schedule B1 of the Act and Rule 3.60(6)(b) of the Rules, but they must make the nomination or nominations at any time after they receive the Statement of Proposals, but before it is approved.; or

o  however, in the event that there is no remaining property that might permit a distribution to the Company's creditors, they shall file a notice of dissolution of the Company pursuant to Paragraph 84 of Schedule B1 of the Act; or

o  alternatively, and should there be no likely funds to distribute to unsecured creditors, the Joint Administrators may seek to place the Company into Compulsory Liquidation in order to bring proceedings that only a Liquidator may commence for the benefit of the estate. In such circumstances, Allister Manson and Trevor John Binyon may ask the court that they be appointed Joint Liquidators, to act either jointly or separately in undertaking their duties as Liquidator.

As detailed above, the CVA exit route is now not being proposed, and therefore it is proposed that the Company will exit Administration via dissolution.

Creditors are invited to vote on the decisions listed in the Proposals by correspondence in the form set out in the notice of decision procedure as contained in the Proposals.

Any estimated outcomes for creditors are illustrative only and cannot be relied upon as guidance as to the actual outcomes for creditors.

Nominated adviser to the Company

In light of the above, the Joint Administrators of the Company have notified SP Angel Corporate Finance LLP ('SP Angel') that they no longer wish to retain a nominated adviser to the Company. SP Angel has therefore stepped down as nominated adviser with immediate effect.

As previously announced, trading in the Company's shares on AIM was suspended on 24 February 2023 and in accordance with Rule 41 of the AIM Rules, the admission of the Company's shares to trading on AIM will be cancelled where these have been suspended from trading for six months. In addition, pursuant to Rule 1 of the AIM Rules, if a replacement nominated adviser is not appointed within one month of today's date (and subject to the admission of the Company's shares to trading on AIM having not previously been cancelled) the admission of the Company's shares to trading on AIM will then be cancelled.  

Trading in the Company's shares on AIM will remain suspended and further announcements will be made in due course as appropriate.

As previously announced, the Company was placed into Administration on 5 June 2023, and Allister Manson and Trevor Binyon of Opus Restructuring LLP were appointed the Joint Administrators.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ('MAR'). Upon the publication of this announcement via Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.

**ENDS**

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