Damas International agrees Dh3bn debt deal with a committee of its lenders.
Dubai-based Damas International agrees Dh3bn debt deal
Damas International, the largest gold and jewellery retailer in the Middle East, has reached a restructuring agreement with a committee of its lenders on more than Dh3 billion worth of debt, it announced today.
In turn, the publicly-listed retailer has extended its debt payment standstill with its creditors until the end of March to allow for the rest of its more than 20 lenders to sign the agreement. A signing meeting has been scheduled for February in Dubai, Damas said in a statement on Nasdaq Dubai.
"In order to allow the company and the steering committee sufficient time to obtain the final approval and signature of the bank lenders... the company considered that it was prudent to extend the standstill period," Damas said.
The deal will allow the company to repay Dh1bn over six years and use the rest as working capital, Anan Fakhreddin, the company's chief executive, told The National earlier this month.
The Dubai-based firm has been negotiating with its creditors to restructure its debt, a move it needed to remain in business. It has had an official standstill on its principal debt payments since March last year.
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Damas has also been working to sign a deal with its former executives, and members of the founding family, to recover Dh614m in deals and nearly two tonnes of borrowed gold, conducted without proper shareholder approval.
The Abdullah brothers - Tawhid, Tawfique and Tamjid - were expected to sign a repayment deal, called a cascade agreement, by the end of January or pay Dh400 million immediately.
However, Damas has agreed to extend the payment date until the end of March.
"The negotiation of the Cascade Agreement has been highly complex and has involved negotiations in excess of 20 bank lenders, including both lenders to the company and lenders to the Abdullah Brothers group."