Stornoway Diamond (TSX: SWY) and its creditors reached a deal that will see the Renard diamond mine continue to operate during corporate restructuring following the company’s failure to generate positive free cash flow in 2019.
Stornoway entered into a letter of intent (LOI) which lays out how Osisko Gold Royalties (TSX: OR), Diaquem (a subsidiary of government-owned Investissement Quebec) and other creditors will form an entity to acquire the company and its mine, 350 km north of Chibougamau.
The company announced the LOI on Sept. 9, the same day it filed for and received protection from the Superior Court of Quebec under the Companies’ Creditors Arrangement Act (CCAA) to pursue restructuring.
Osisko and its partners intend to acquire Stornoway via a credit bid, using debt owed as currency in the transaction.
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