Greenland Ruby Is Up For Sale

New York—After suspending operations about a year and a half ago, Greenland Ruby has filed for an in-court restructuring of the company.   

The company, which mines rubies and pink sapphires at the Aappaluttoq (Greenlandic for red) mine, has not generated sufficient income to pay its debts and is running out of money.

Greenland newspaper Sermitsiaq reported in August 2023 the mine had a debt of 509 million Danish kroner, which is about $73 million at current exchange rates.

In a statement released last week announcing the restructuring, Greenland Ruby said the current owners’ investment of 1.5 billion Norwegian kroners (just under $140 million at current exchange rates) is nearly depleted. 

After consulting with its largest creditor, Nebari Natural Resources Credit Fund I, the company’s board decided to pursue a restructuring.

The process involves appointing administrators to work with Greenland Ruby management to identify the best solution for the company’s creditors and its future.   

Payments to creditors will be postponed during the process.   

A typical outcome, the company said, includes selling the business and using the proceeds to pay the costs of the restructuring process, and then the company’s creditors.

Greenland Ruby said its goal is to avoid liquidation and re-establish itself as a “competitive and attractive” company.

“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,” CEO Arnt Eirik Rørnes said in the company’s statement. 

Rørnes was appointed CEO of Greenland Ruby in early 2023.  

“Furthermore, the company has developed new, modern channels for the sales and distribution of the gemstones.”  

In addition to its operations in Greenland, the restructuring will include its subsidiaries in the United States and France, but not its service company in Thailand. 

Greenland Ruby said it will submit petitions for restructuring proceedings to the Maritime and Commercial High Court in Copenhagen, Denmark, and the bankruptcy court in Nuuk, Greenland.  

Greenland Ruby and its administrators are working with Naalakkersuisut, the Greenlandic self-government, to ensure they follow current rules and conditions throughout the process, the company said. 

New York-based consulting firm Alvarez & Marsal will act as lead advisor for the sale of the Greenland Ruby and/or its assets, including the Aappaluttoq mine, its gemstone inventory and other assets.  

The marketing and sales of any existing rubies and pink sapphires will continue, with some limitations during the restructuring proceedings. 

Following reports that Greenland Ruby had not been meeting production expectations, the miner temporarily closed its facilities at the end of 2022 to reduce overhead.

“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,” Rørnes said in the recent statement. 

Prior to joining Greenland Ruby, Rørnes worked for Leonhard Nislen & Sonner AS (LNS), Greenland Ruby’s parent company.

LNS Greenland, an investor in the project, was awarded the mining license for the Aappaluttoq Ruby Mine after the site’s previous miner, True North Gems, filed for bankruptcy in September 2016. 

Greenland Ruby A/S was established in October 2016 to take over the exploration license and handle promotion and sales of the mine’s output.

In a 2017 interview with National Jeweler, Hayley Henning, Greenland Ruby’s former chief commercial officer, she said life of mine for Aappaluttoq was expected to be about nine years.   

Although the mine closed short of that prediction, Rørnes said in the statement that the board still believes in Greenland Ruby and its operation in Greenland, and that’s why it is pursuing a restructuring. 

He said, “The company holds an extraction license 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 unrealized potential to create jobs and value in Greenland.”