Company drops attempt to block Ekati sale

Courtesy of National Jeweler

20130208-182244.jpg

Toronto –The $500 million deal that would transfer ownership of Canada’s Ekati Diamond Mine from BHP Billiton to Harry Winston Diamond Corp. is free to proceed, Harry Winston announced Monday.

According to a news release from Toronto-based Harry Winston, C. Fipke Holdings Ltd. discontinued the lawsuit filed just a few weeks ago against Harry Winston, BHP Billiton Canada Ltd., Stuart Blusson and Archon Minerals that attempted to block the sale of the mine.

Harry Winston and BHP Billiton announced in November that BHP Billiton, which had expressed its desire to exit the diamond business, would be selling its Canadian diamond mining operations as well as its sorting and sales facilities in Yellowknife, Northwest Territories and Antwerp to Harry Winston in a deal worth half a billion dollars.

BHP Billiton was under contract to offer its minority joint venture partners the right of first refusal on its mining operations before selling them to Harry Winston. One of those partners, C. Fipke Holdings Ltd., objected to the sale. (Blusson and Archon Minerals are the other minority joint venture partners.)

Fipke alleged that Harry Winston’s debt financing arrangements for the acquisition interfered with its ability to arrange financing and wanted a court order prohibiting the purchase unless and until BHP Billiton gave it a revised offer.

The dropping of the lawsuit clears the way for the deal to proceed, though it still is subject to satisfaction of closing conditions, including regulatory approvals. A Harry Winston spokesperson told National Jeweler in mid-January that they expect the sale to close in two to three months’ time.

Harry Winston is a company in the midst of major changes as it transitions from being a diamond miner and retailer into solely a mining company.

In addition to its acquisition of BHP Billiton’s diamond business, the company is rumored to be a frontrunner to buy partner Rio Tinto out of the Diavik Diamond Mine. The two companies currently operate Diavik as a joint venture that is 60 percent owned by Rio Tinto, with remaining 40 percent owned by Harry Winston.

Harry Winston also recently announced a deal to sell its retail division to the Swatch Group in a $1 billion deal.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s