(PRESS RELEASE) In 2016, Greenland Ruby acquired the license for gemstones extraction in Greenland. “Despite successful extraction and substantial investments in facilities and in the Greenlandic community, increased interest rates and inflation have made the gemstones market significantly more challenging in recent years”, says Arnt Eirik Rørnes, CEO in Greenland Ruby.
Greenland Ruby was established with the ambition to develop a profitable and sustainable extraction of certified and traceable gemstones in Greenland. Additionally, the company has managed the sales and marketing of rubies and pink sapphires to the global market. Due to more challenging market conditions, the mining facilities in Greenland were temporarily closed at the end of 2022 to reduce the company’s running costs.
Considerable investments
The current owners have invested close to 1.5 billion Norwegian kroners (NOK) in the company, and these investments are for the most part already depreciated.
“Greenland Ruby has made considerable investments in both facilities and infrastructure related to the mining facility in Aappaluttoq as well as in the Greenlandic community. Furthermore, the company has developed new, modern channels for the sales and distribution of the gemstones”, Rørnes continues.
In consultation with the company’s largest creditor, Nebari Natural Resources Credit Fund I, the board has decided to initiate a restructuring of the company.
The restructuring involves the appointment of Administrators who will work with the company’s management to identify the best solution for the company’s creditors and the company’s future. While this process is underway, there will be a postponement of payments to creditors.
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A typical restructuring outcome includes sale to new, strategic owners who will continue with whole or parts of the business. The proceeds of the sale are used to pay the costs of the restructuring process, with the next payment priority being the company’s creditors.
Hopes for the future
The goal of the restructuring is to avoid a liquidation and to re-establish a competitive and attractive company. In addition to Greenland Ruby’s operations in Greenland, the restructuring will include market-oriented, subsidiaries in the US and France. The service company in Thailand will not be directly included in the restructuring.
“The board has decided to pursue a restructuring as it still believes in Greenland Ruby and its operation in Greenland. The company holds an extraction licence to one of the world’s richest ruby deposits and has developed an innovative business model by offering certified and traceable gemstones of the highest quality on a global marketplace. The board also considers Greenland Ruby to have an unrealised potential to create jobs and value in Greenland”, Rørnes concludes.
The petitions for the restructuring proceedings will be submitted to the Maritime and Commercial High Court in Copenhagen, Denmark, and the bankruptcy court in Nuuk, Greenland, respectively, and the proceedings will commence immediately. Greenland Ruby and its administrators are in close dialogue with the Greenlandic self-government (Naalakkersuisut) to ensure that current rules and conditions are followed in the process.
Alvarez & Marsal has been retained as a lead advisor for the sale of the Company and or its assets which includes the Aappaluttoq mine, gemstone inventory and other assets.
The marketing and sales of rubies and pink sapphires will be maintained with some limitations during the restructuring proceedings.
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