Second extension for company in two months
UAE jewellery retailer Damas International has extended a debt standstill on more than AED3bn ($816.7m) to 30 November from its original deadline of 30 September.
This is the second delay after Damas extended the standstill agreement on 22 July, saying it needed more time to finalise its restructuring plan.
The jeweller is also in the final stages of negotiating a new repayment agreement, referred to as a cascade agreement, with its founders Tawfique, Tawhid and Tamjid Abdullah who owe Damas about AED606m in unauthorised transactions. Damas announced on 12 October last year that its chief executive, Tawhid Abdullah, had resigned “due to his disclosure to the board of what is understood to be unauthorised transactions conducted by him.”
The new cascade agreement is expected to comprise of a three-year deal that will enable the Abdullah brothers to liquidate their assets in property at a higher price.
In March this year, the Dubai Financial Services Authority (DFSA), regulator of the Dubai International Financial Centre (DIFC), banned the Abdullah brothers from the board of any DIFC company for 10 years and fined them a total of $3m.
In April, the group named nine new board members after its previous board resigned on orders of the DFSA.
Damas is dealing with nearly 20 banks on its restructuring, including France’s BNP Paribas and the UK’s Barclays as well as local lenders, according to a financial statement released in December 2009.