| Tue 26 May 2009, 14:44 | | RDI - Executive Directors Of Rockwell Diamonds Confirm Fair Rights Offering |
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RDI
RDI
RDI - Executive Directors Of Rockwell Diamonds Confirm Fair Rights Offering
ROCKWELL DIAMONDS INCORPORATED
(A company incorporated in accordance with the laws of British Columbia, Canada)
(Incorporation number BCO354545)
(Formerly Rockwell Ventures Inc.)
(South African registration number: 2007/031582/10)
Share code on the JSE Limited: RDI ISIN: CA77434W1032
Share code on the TSX: RDI CUSIP Number: 77434W103
Share code on the OTCBB: RDIAF
("Rockwell")
EXECUTIVE DIRECTORS OF ROCKWELL DIAMONDS CONFIRM FAIR RIGHTS OFFERING IS BEST
OPTION FOR SHAREHOLDERS AND REFUTE PALA`S ALLEGATIONS
May 26, 2009, Vancouver, BC - The Executive Directors of Rockwell Diamonds Inc.
(TSX: RDI; JSE: RDI; OTCBB: RDIAF), David Copeland, P.Eng, Chairman, Dr. John
Bristow, CEO and Dr. Mark Bristow, today responded to the May 25, 2009 news of
Pala Investment Holdings Limited ("Pala") noting that it is at odds with the
documentary record and reiterating why they believe their proposed Fair Rights
Offering is the most appropriate and equitable financing solution for all
shareholders.
"The Fair Rights Offering will achieve a number of key objectives," said Mr.
Copeland. "It will provide the company with added liquidity in the current
difficult markets, which will allow us to continue our conservative plan of
operations and enable us to protect the company against opportunistic advances
by predatory operators or investors. The Fair Rights Offering will do so
without excessively diluting existing shareholders, and on a basis that all
shareholders are being treated fairly and not being asked to give up the
protection of the Shareholders Rights Plan in return for these funds."
Noting that the documentary record conflicts with Pala`s news release
statements, Mr. Copeland commented, "All Rockwell directors received a 10 page
memo from Rockwell`s corporate counsel dated April 20, 2009 reviewing in detail
the three main financing options available to Rockwell, namely a private
placement, a prospectus and a rights offering. Rockwell was awaiting further
input from its financial advisors on the memo when Pala pre-emptively
interrupted that process by pressing for the special meeting a month or so
before the planned annual meeting."
"For Pala to claim that a private placement was settled, or that we have flip-
flopped, is simply misleading," said Mr. Copeland. "Pala`s Rights Offering
coupled with striking down the Shareholders Rights Plan is self-serving,
allowing Pala to make yet another attempt to acquire control of the company
without paying shareholders a premium."
Typically, rights offerings are not fully subscribed, and with Pala acting as
what is referred to as a "back-stop", they would acquire all rights which were
not subscribed to by other shareholders. As such, this back-door approach would
enable Pala to increase its position in the company, thereby gaining further
control. The purpose of the standby-guarantee (proposed by the Executive
Directors) is to help ensure that the Fair Rights Offering is successful without
allowing any shareholder to exceed 20% ownership. In consultation with financial
advisors, the Executive Directors will ensure the standby fees are within
acceptable market rates for this type of compensation.
Mr. Copeland concluded by saying, "Rockwell shareholders will quickly see that
the third party stand-by fee we propose represents a small investment in
Rockwell`s independence and that the true cost of Pala`s offer of a free back-
stop will be ruinous."
The Executive Directors have established a purpose-specific web site,
www.executivedirectorsrockwell.com, where information is available for all
shareholders relating to the issues concerning the Special Meeting. This site
will be updated regularly and kept current leading up to the Special Meeting on
June 17, 2009.
THE FUTURE OF ROCKWELL DIAMONDS INC. WILL BE DETERMINED BY THE
OUTCOME OF THIS VOTE. DO NOT ALLOW A DISSIDENT MINORITY
SHAREHOLDER TO TAKE CONTROL OF ROCKWELL AND YOUR INVESTMENT
VOTE ONLY THE GREEN PROXY
The Executive Directors urge you to support their continued stewardship of the
Company by voting AGAINST the special resolution to remove them from office and
by voting FOR a Fair Rights Offering, which will provide balance to the
Company`s shareholder constituents, by using the GREEN form of proxy.
For further information, contact:
The Laurel Hill Advisory Group by email at rockwellinfo@laurelhillag.com or by
phone at:
Toll free Or
Collect
North America 1-888-882- 1-416-637-
6737 4661
Europe 00-800-8655-
1111
South Africa 0-800-982-179
The comments Executive Directors in this news release and on the website are
solely their own and not of any other director. For general information about
Rockwell please visit its own website at www.rockwelldiamonds.com or contact
Investor Services at (604) 684-6365 or within North America at
1-800-667-2114. Investor Services deals with Company information and is not
authorized to discuss matters or answer questions relating the contested special
shareholders meeting. Questions relating to the Executive`s Director`s positions
in respect of the Meeting should be directed to Laurel Hill Advisory Group as
per above.
No regulatory authority has approved or disapproved the information contained in
this news release.
26 May 2009
Sponsor:
Sasfin Capital (A division of Sasfin Bank Limited)
Date: 26/05/2009 14:44:01 Produced by the JSE SENS Department.
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