African Diamond Plc, the diamond company involved in AK 6 resources, has issued out a scheme of arrangement┬áto┬áshareholders, indicating that it is planning to de-list on both the London and Botswana Stock Exchanges (BSE),┬ábefore the end of the year.
The move follows what┬áwas dubbed a “compelling” offer by Lucara when it proposed to acquire all African Diamonds shares┬áand locking its┬áshareholders┬áinto a much bigger company with operations in the southern African region.
The total value of the┬á proposed┬átransaction will be $ 82 million Canadian (US $ 80 million, P 528 million ) ÔÇörepresenting a 27 percent upside ÔÇö┬á┬á based on Lucara price and Canadian dollar exchange rate as at the close of┬á business on October 10.
“The logic of this deal is compelling.┬á Marrying African Diamonds and Lucara will create a $240 million Canadian emerging diamond producer controlling 2 new kimberlite diamond mines,” Chairman of African Diamonds, John Teeling said as he urged investors to support the move.
“The new company, with strong financial backing, will be perfectly poised to exploit an expected gap in diamond supply,”┬áhe said.
Under the proposed deal,┬áshareholders will┬áhold a┬á26.57 percent stake, including indirect interest┬áin AK6 deposit.
Further, under the proposals┬áAfrican Diamonds will demerge the diamond prospecting┬áinterest of African Diamonds to Botswana DiamondsÔÇö- a company that will be charged with exploration┬áacross the southern African region.
┬á“Lucara would acquire the entire issued and to-be-issued share capital of African Diamonds, including African Diamond’s 40 percent interest in the AK6 diamond mine in Botswana, by way of a Court-sanctioned scheme of arrangement,” the company said on Friday.
Under the Proposals, AFD Shareholders would receive 0.8 of a common share in Lucara (credited as fully paid and rounded down to the nearest whole number) and one (1) ordinary share of ┬ú0.01 in Botswana Diamonds for every one (1) ordinary share of ┬ú0.01 in African Diamonds held by those shareholders.
The scheme envisages the┬álast day of African Diamonds trading as December 17, this year before┬áthe┬ácancellation of┬áits delisting┬áon December 21. Shareholders are expected to be given share certificates in┬áBotswana Diamonds and Lucara share in the first week of┬áJanuary, 2011.