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GDH
GDH
Good Hope Diamonds (Kimberley) Limited - Announcement
Good Hope Diamonds (Kimberley) Limited
(Registration number 1983/013789/06)
Share code: GDH ISIN: ZAE000050381
("Good Hope" or "the company")
ANNOUNCEMENT
Regarding:
- OUTCOME OF LITIGATION;
- REASSURANCE REGARDING ONGOING FUNDING OF THE COMPANY;
- UPDATE ON THE DEMOCRATIC REPUBLIC OF THE CONGO AND BEE;
AND
- SUSPENSION OF TRADE AND FURTHER CAUTIONARY ANNOUNCEMENT
1. OUTCOME OF LITIGATION
Judgment ("the judgment") was handed down on Tuesday, 9
May 2006 in the matter between Anglo South African
Consolidated Diamond Investments (Proprietary) Limited
("Anglo SA Consolidated") and the company and eight
others including inter alia Don Diamonds (Proprietary)
Limited ("Don"), Good Hope Diamonds and Estates
(Proprietary) Limited ("GHD&E"), Mr Emmanuel Cambouris
and the trustees for the time being of the El Shaddai
Trust in the Witwatersrand Local Division of the High
Court of South Africa. This matter concerned a dispute
regarding the transfer of the shares in Don and in GHD&E
from Diamond Land Mining (Proprietary) Limited ("DLM") to
the company, which transfer was disclosed at the Annual
General Meeting of shareholders held on 21 January 2005
and in both the Chairman"s statement and the Directors"
report contained in the company"s annual report for the
year to 30 June 2005. DLM was subsequently placed into
liquidation as a result of a claim by Anglo SA
Consolidated in respect of a loan account of R13.8
million ("the claim"). The judgment has transferred
ownership of Don and GHD&E to DLM, which effectively
removes from Good Hope control and ownership of the
company"s major assets. The company has instructed its
legal advisers to appeal against the judgment.
Further litigation is proceeding in the Witwatersrand
Local Division of the High Court of South Africa between
Regal Foundation ("Regal"), based overseas in
Liechtenstein, the seller of Bellissimi Tesori Limited
("Bellissimi") registered in the British Virgin Islands,
which was the holding company of DLM, on the one hand and
Sky, which bought Bellissimi, on the other hand in
respect of the payment by Sky to Regal of the purchase
price for Bellissimi ("the proceedings"). An undertaking
has been received by the company from Dr Kossowsky, the
sole shareholder of Sky, that notwithstanding the
possible sale of Sky, the obligations of Sky will be
honoured. ("the obligations") and that it is in a
position to do so. Once payment has been made, the
company is of the opinion that its obligations in respect
of the claim will probably be fulfilled in terms of the
sale agreement between Regal and Sky, the effect of which
would be that DLM could then be taken out of liquidation
thereby effectively restoring ownership and control of
the company"s major assets to Good Hope.
2. REASSURANCE REGARDING ONGOING FUNDING
Good Hope has undertaken that the assets of Don and GHD&E
will not be sold. This means that although mining will
continue, the company will not be in a position to sell
its diamonds until that time. Shareholders were informed
in the Chairman"s statement contained in the Annual
Report for the year to 30 June 2005 that the group was
"being funded by a trust of which a shareholder and
director of the company is a trustee". The shareholder
and director concerned is the Chairman of the company, Mr
Cambouris and the trust concerned is his family trust,
The El Shaddai Trust ("The Trust"). Assurances have been
received by the company from the trustees of The Trust
that The Trust will continue to support the company
financially until control of Sky changes and the
prospective new owners of Sky assume the financing
burden.
3. UPDATE ON THE DEMOCRATIC REPUBLIC OF THE CONGO AND BEE
Shareholders were informed in the further cautionary
announcement dated 18 January 2006 that the company was
proceeding with negotiations to acquire interests in the
Democratic Republic of the Congo ("DRC") and a Black
Economic Empowerment transaction ("BEE transaction"). A
transaction in respect of the DRC assets ("the assets")
envisaged has been concluded by a third party which has
in turn offered to make the assets available to Good Hope
in the event that the proposed new owners of Sky wish to
proceed and that the matters referred to in Paragraph 2
of this announcement can be satisfactorily and quickly
resolved ("the DRC offer"). The proposed BEE
transaction is still available but has been deliberately
slowed down due to certain of the developments forming
the subject matter of this announcement.
4. SUSPENSION OF TRADE AND RENEWED CAUTIONARY
The company requested The JSE Limited ("the JSE") to
suspend trade in the shares of Good Hope from the
commencement of trade today and the JSE has agreed to
such suspension until the situation has been resolved.
In view of the degree of uncertainty posed by the
litigation, the DRC offer and the BEE transaction, the
outcome of which may have a material effect on the
company"s share price, shareholders are advised to
continue to exercise caution when dealing in their shares
until further notice.
11 May 2006
Hyde Park
Sponsor
LPC MANHATTAN MOELA
LPC Manhattan Moela (Pty) Ltd
Date: 11/05/2006 05:31:01 PM Produced by the JSE SENS Department
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