Canadian diamond miner Archangel Diamond Corp has announced it will not go ahead with a proposed plan to raise funds and restructure its debt after it rejected a buyout offer by diamond industry giant De Beers, which would have increased the conglomerate's stake in the Canadian company from the current 58% to a proposed 72%.

De Beers announced in March that it plans to increase its stake in Archangel Diamond Corp by offering a $2.6 million private placement, and $6.7 million in debt restructuring. The funds from the move would have been used not only to restructure Archangel's debts but also to cover its current operating costs.

Under the proposed deal, Firebird Global Master Fund, which currently has a 19% stake in Archangel, was to increase its stake to 24% in an additional effort to bolster the company.

In a statement to the Toronto Stock Exchange, Archangel announced that it will not be able to file its 2008 financial statements at this time, stating that the delay is "a result of the time required to reflect and account for the outcome of any significant pending debt refinancing in the 2008 Annual Financial statements and to complete the necessary accounting analysis." Archangel also said that there are currently no insolvency proceedings against it.

Last year, Archangel rejected an offer to buy a 49.99% stake in the Verkhotina diamond project in Russia for a reported $225 million, citing unfavorable conditions in the global diamond market stemming from the current global recession.