Lucapa Proposes 100% Creditor Return and Shareholder Payout Above Market Price
Lucapa Diamond Company has entered a binding Deed of Company Arrangement with Dubai-based Gaston International, proposing full creditor repayment and a partial shareholder return above recent share prices. Creditors will vote on the plan on 20 August 2025.
- Binding DOCA agreement signed with Gaston International DMCC
- 100% return proposed for creditors under the arrangement
- Estimated shareholder return up to 1.8 cents per share, exceeding last traded price
- Creditors’ meeting scheduled for 20 August 2025 to approve the proposal
- Transaction subject to regulatory and court approvals
Background and Administration Update
Lucapa Diamond Company Limited, along with its subsidiaries, has been under voluntary administration since May 2025. The administrators, appointed from KordaMentha, have been managing a dual-track process to either sell or recapitalise the group’s assets and operations. This process has now culminated in a binding term sheet for a Deed of Company Arrangement (DOCA) with Gaston International DMCC, a Dubai-based mining investment conglomerate.
Details of the Proposed Arrangement
The proposed DOCA envisages a full transfer of Lucapa’s shares to Gaston International or its nominee, effectively handing control of the company to the Dubai group. Importantly, the arrangement promises creditors a full return of 100 cents on the dollar, a rare outcome in insolvency scenarios. Shareholders are also expected to receive up to 1.8 cents per share, which notably exceeds Lucapa’s last traded price of 1.4 cents.
However, this proposal remains conditional on several key approvals – creditor endorsement at the upcoming meetings on 20 August, regulatory consents, and court permission to transfer shares under Australian corporate law. These conditions introduce some uncertainty, but the administrators’ report suggests a positive outlook for stakeholders.
Implications for Creditors and Shareholders
For creditors, the DOCA offers a reassuring prospect of full repayment, which is often not guaranteed in insolvency proceedings. Shareholders, who typically face significant losses in such restructurings, stand to recover some value exceeding recent market prices, signaling potential upside if the arrangement proceeds.
The involvement of Gaston International, part of the Jemora Group with expertise in precious metals and gemstones, also hints at a strategic investor committed to revitalising Lucapa’s operations. Their Dubai base aligns with ambitions to position the UAE as a mining investment hub, potentially opening new avenues for Lucapa’s future growth.
Next Steps and Market Watch
The critical next milestone is the creditors’ meeting on 20 August 2025, where the DOCA will be put to a vote. Shareholders, while unable to attend, will be closely watching the outcome, which will be promptly announced to the market. Regulatory and court approvals will follow, shaping the timeline for the transaction’s completion.
Investors and market participants should monitor the Administrators’ detailed report for further insights into the financial and operational impacts of the restructuring. The successful execution of this DOCA could mark a turning point for Lucapa Diamond, transitioning from administration towards renewed stability and growth.
Bottom Line?
Lucapa’s fate now hinges on creditor approval and regulatory green lights, setting the stage for a pivotal restructuring outcome.
Questions in the middle?
- Will creditors approve the DOCA at the 20 August meeting?
- What regulatory hurdles remain before the share transfer can be completed?
- How will Gaston International’s ownership influence Lucapa’s strategic direction?
