VANCOUVER, May 26 /CNW/ - 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
firstname.lastname@example.org or by phone at:
Toll free Or Collect
North America 1-888-882-6737
Europe 00-800-8655-1111 1-416-637-4661
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.
For further information:
For further information: The Laurel Hill Advisory Group by email at
email@example.com or by phone at: North America, Toll free
1-888-882-6737; Europe, Toll free 00-800-8655-1111, Or Collect (416) 637-4661;
South Africa, Toll free 0-800-982-179