Publicly traded New York City diamond manufacturer Lazare Kaplan International is again not reporting its financial results because of the so-called material uncertainties that have plagued it for more than two years.
The “uncertainties” involve the recovery of certain assets, and the company’s obligations under certain lines of credit, LKI says. Once those issues are settled, the company says it will file its financial results “promptly.”
Even so, while some of the issues have been settled, the company warns in its latest 8K “the inability of [LKI] to timely resolve the remainder of the material uncertainties has adversely impacted the company’s ability to transact business in the ordinary course…[including] the ability of the company to maintain and/or expand its operations.”
Most of the current uncertainties seem to revolve around a current suit against LKI by Antwerp Diamond Bank in the Antwerp Court of Commerce. ADB is seeking payments under a $45 million credit facility, LKI says. The company reports it is seeking a negotiated settlement to the case, but threatens that, if a negotiated settlement isn’t reached, the company intends to initiate legal proceedings in the United States against ADB and parent company KBC Bank.
The company did have some good news: It anticipates net sales of approximately $37.5 million for the first quarter of 2012, compared with net sales of $33.2 million for the first quarter of 2011. The increase in net sales reflects greater sales of both polished and rough diamonds, it says.