Dominion Diamond Mines CCAA restructuring

On April 22, 2020, Dominion Diamond Mines ULC and certain of its affiliates (collectively, “Dominion”) filed for insolvency protection under the Companies’ Creditors Arrangement Act (“CCAA”), obtaining an order from the Alberta Court of Queen’s Bench (the “Court”) granting Dominion protection under the CCAA.

At the time of filing, Dominion had received and was considering a proposal from an affiliate of The Washington Companies (“Washington”), Dominion’s equity owner at the time, to provide debtor-in-possession (“DIP”) financing, that would provide sufficient liquidity to fund business operations and other expenses through the CCAA process. The proposal was conditional upon Dominion agreeing to: (i) a memorandum of understanding regarding a possible sale of its assets to Washington, as a stalking horse bidder; and (ii) bidding procedures for the solicitation of competing offers to such asset sale, either to purchase Dominion’s assets or to make an investment in the company.

On May 22, 2020, Dominion and Washington announced the signing of a letter of intent under which an entity to be managed by Washington would acquire substantially all of Dominion’s assets for approximately US$126 million in cash and the assumption of substantially all of Dominion’s operating liabilities. Washington also agreed to provide Dominion up to US$60 million in short-term DIP financing.

A successful bid, submitted by Canadian Diamond Holdings, L.P. and CA Canadian Diamond Mines ULC (affiliates of the Washington) under the sales process approved by the Court on June 19, 2020, was announced on September 16, 2020. The bid narrowed the scope of the purchase outlined in the letter of intent to only include Dominion’s assets related to Ekati, excluding its 40% interest in the Diavik joint venture. In addition to approval from the Court, closing of the bid was conditional on Washington entering into an agreement with the issuers of approximately C$280 million in surety bonds currently posted with the Government of the Northwest Territories to provide continued security for the reclamation obligations related to Ekati. An impasse in negotiations between the purchasers and the Surety Bond Issuers was announced on October 9, 2020, ending the bid as no transaction was capable of being completed and paving the way for advisors to come up with an alternative.

Settlement of a new purchase agreement was reached on December 7, 2020 with Arctic Canadian Diamond Company Ltd. (“Arctic”), a company formed and owned by funds and accounts managed by DDJ Capital Management (“DDJ”), Brigade Capital Management, LP (“Brigade”) and Western Asset Management Company, LLC (“Western Asset”), members of an ad hoc group of bondholders in Dominion owed more than C$800 million.

Approved by the Court on December 11, 2020, successful completion of the deal was announced on February 3, 2021.

Further information on Dominion’s restructuring can be found on the monitor’s website.

Dominion Diamond Mines ULC was a Canadian mining company and one of the world’s largest producers and suppliers of premium rough diamond assortments to the global market. The company owned a controlling interest in the Ekati Diamond Mine, which it operated, as well as 40% of the Diavik Diamond Mine. The company also held a controlling interest in the Lac De Gras Diamond Project. The Ekati and Diavik Diamond Mines, and the Lac de Gras Diamond Project, are all located in the Northwest Territories of Canada.