Namco thrown a line

Still hurting for cash after an accident disabled its NamSSol seabed crawler during operations off the coast of Namibia in January, Namibian Minerals (NMR-T) has received a US$6-million bridging facility from Israeli diamond trading house Leviev Group, Namco’s largest shareholder and sole marketing agent, to keep the marine diamond miner afloat.

Namco has already drawn down US$2.6 million from the facility, and has until the end of October to draw down the remainder. The loan, which bears interest at LIBOR (London Inter-bank Offer Rate) plus 2.5%, and is also subject to a 0.75% facility fee has a term of three years from initial drawdown.

As principal security for the loan Namco has put up the expected proceeds (excluding US$1 million above US$5.5 million previously offered to the company’s creditors) from its business interruption insurance claim arising from the NamSSol accident.

The Leviev Group, which is the world’s largest diamond manufacturer, owns a 39% stake in Namco and has appointed three directors to the company’s board.

At the end of June, Namco had a working capital deficiency of US$27.9 million and US$50 million in debt. For the first half of 2001, Namco posted a loss of US$25.1 million on revenue of US$6.2 million. First-half diamond production tallied just 24,500 carats, about a quarter of that produced a year earlier. Moreover, the stones fetched only US$164 per carat, versus US$185 per carat last year, accounting for some of the financial losses.

Third-quarter production is headed higher with the resumption of resource sampling.

Namco’s CEO Alastair Holberton said, "We are continuing to recover from the events of the beginning of the year. Production from our new Nam 2 seabed crawler is continually improving and our drill sampling is off to a promising start. We are focused on rebuilding shareholder value.”

Namco says it expects Nasdaq to lift the trading halt on its shares on Sept. 25, 2001, due to the discharge of Namco’s subsidiaries from provisional liquidation.

In February, Namco put a number of its South African and Namibian subsidiaries in provisional liquidation after the accident involving its NamSSol device. Nasdaq then issued a trading halt on the company’s shares. In March, the Leviev Group injected US$15 million into the company and by April underwater mining resumed.

Since placing the subsidiaries in provisional liquidation, Namco has raised about US$35 million of financing. The company is in talks with its bankers, which have approved the bridging facility, to reschedule its debt.