Eurostar Diamond Traders, traditionally considered one of the largest companies in the industry and the former owner of Hearts On Fire, may have to file for bankruptcy in Belgium next week, following a Feb. 28 ruling by the Antwerp Court of Appeal that rejected its plan for a reorganization, one of the company’s provisional administrators told JCK.
The Antwerp Commercial Court will issue a formal ruling next week. The company entered administration on Nov. 5, 2018.
According to a report in the Belgian newspaper De Tijd, in rejecting the company’s proposal, the Antwerp Court of Appeal noted that Eurostar owes large amounts to its leading creditors, including banks ABN Amro, Standard Chartered, and the Bank of India, and that the financial institutions appear to have lost faith in the company. The company’s debt has been reported at $500 million.
The ruling added that Eurostar’s loss of its De Beers sightholder status has fueled doubts about its viability. While De Beers did not answer a query on Eurostar’s status, its name does not appear on the company’s current list of clients. Eurostar had been a sightholder since 1986.
Eurostar did not respond to a request for comment. However, a representative told De Tijd it “hopes and counts” on the Antwerp Commercial Court not forcing it into bankruptcy.
It reportedly said that “good talks” were being conducted with its banks and creditors. It added that it has operated in the diamond business for 33 years and has loyal customers who hope to continue doing business with it.
Last year, Eurostar reportedly sued one of its bankers, ABN Amro, for allegedly providing faulty credit advice. ABN Amro denied the charges.
Eurostar may be best known in the United States for buying a stake in diamond brand Hearts On Fire in 2001. The brand is now owned by Chow Tai Fook, which bought it in 2014.
(Image courtesy of Eurostar Diamond Traders)