Fabrikant, GIA: A Busy News Weekend
A number of things happened this weekend:
- Fabrikant went chapter 11. Here is what we know: Their assets are $225 million, and debts are $363.9 million. According to Dow Jones, it owes bank lenders $161.9 million, other creditors $36 million and $124 million to its non-bankrupt subsidiaries. The papers we've obtained list their number one unsecured creditor — a position Fabrikant has held on a petition or two — as ABN-Amro, with $13.8 million, and Antwerp Diamond Bank, with $8.84 million.
Even though this was widely expected, it's still kind of a shock. The company's strategy to cope with its mounting problems seens to have been to sell of its various divisions; India's Tara Jewels bought 75% of Fabrikant-Leer, and its onetime partner Salant took over its Israeli sightholder divison. It is not clear what will happen to all their associated companies — including Robert Lee Morris and Simmons Jewelry Company. (UPDATE: Robert Lee Morris looks like it was just sold too.) The fact that its lenders were unwilling to float them through Christmas is, as they say, not a good sign. And with the banks on the hook for so much, it will make them a lot more conservative in their lending. A very bad situation.
- Donna Baker, until now "acting president" of GIA, is now permanent president. Here is the backgrounder and interview we did with her when she was first appointed; perhaps the most interesting fact is she spent ten years as a nun. She is also popular internally and people there seem happy with the choice.
- Finally, the Daily News gave their two cents on the new building on 47th Street (arguing it will "destroy the Diamond District"), and here is another article on "Blood Diamond" and the industry, this time a rather fair one from Time magazine.
Emma commented:
That comment was actually from the writer of the movie, there was a
Q&A after the screening (im luck enough to see almosto all the
movies way in advance thnx to my lovely half..), and i was pretty
astonished. but it is not the first time i hear something like
that. i believe that anyway even if they stopped in 2000 they have
enough "leftovers".. dont you? the movie is beautiful, LOVED the
photgraphy, breath taking, such a gorgeous contry Africa is.
Rob Bates commented:
Hi Emma -- Thanks for the review and comment. FYI, the DTC/De
Beers, for all intents and purposes, stopped stockpiling in the
year 2000 (although the movie is set in 1999.) And the number never
reached $8 billion. Is that in the movie? Anyway I would love more
details on the film and agree how important it is for retailers to
look for the proper warranties. Best, Rob
Emma Trossarelli commented:
just saw the movie. though it was very interesting, very tough and
probably shocking enough that a good part of the ppl that do not
have ANY CLUE on what's going in Africa, may start to think. maybe
just think, but it's better than nothing. i dont think that the
Diamond buz will be affected too much as far as sales. it is most
important in my opinion to educate retailers and make them
understand what is the importance of having their diamond cerfied.
Do you know that the Diamond trading co in london keeps 8/9
BILLIONS wothr of Diamonds in their vaults in order to control the
prices of diamonds?? i didnt.. now i do.
Hedda Schupak commented:
Having just read the Time article referred to in Rob's post (with a
link so you can read it too), I've got to agree that it's basically
fair. Of course, Global Witness does get its little digs in, but
let's not forget that if the conflict diamond situation goes away,
so does Global Witness's reason to exist.
Hmmmm....interesting....but let's not go there. Meanwhile, as for
Leo DiCaprio's comment about not letting his dates wear diamonds,
it might carry a little more weight if he actually went to some of
the places that have been helped by diamond mining profits and THEN
rendered his final opinion.
