Damas signs standstill deal
Restructuring plan to be implemented at the end of the period, company says
Abu Dhabi : Damas, the Middle East's largest jeweller by number of outlets, said yesterday it had signed a standstill agreement with a "majority of its bank lenders", as the company looks to rebuild its business and image tarnished by negative earnings and corporate scandal in 2009.
"A restructuring plan is currently being developed by the company, which will be implemented at the end of the standstill period," the company said in a statement. Officials declined to disclose more details when contacted.
Damas said it is putting in place systems to "ensure compliance with the highest standards of corporate governance". In a separate statement to Nasdaq Dubai, where the company's shares are listed, Damas announced it would hold its shareholders' meeting on April 19 to elect a new board.
The company declined to provide the amount of debt to be restructured or the agreed standstill period. In its semi-annual earnings release, Damas reported Dh3.25 billion in liabilities and a Dh714.9 million loss for the period ending September 2009, compared with a Dh91.1 million profit a year earlier.
In announcing its results in December, the company said it would undergo a restructuring process that would involve closing or relocating some of its 450 regional stores.
In February, Damas appointed a PricewaterhouseCoopers partner as its chief restructuring officer, but has since declined to comment on its progress and no disclosures have been made to Nasdaq Dubai.
Last week the Dubai Financial Services Authority (DFSA) handed the company and its family owners a record Dh13.6 million fine and ordered the dismissal of its board for violating corporate governance standards.
Fine
The Abdullah brothers Tawhid, Tamjid and Tawfique, were ordered to pay the company back Dh365 million plus the value of 1.9 million grams of gold, or about Dh259 million at current prices. The regulatory investigation found the brothers tapped company accounts for personal use with the knowledge of the board and Damas' finance department.
Damas shares closed yesterday at $0.155, down 31 per cent since January 1.
