Damas International, the largest gold and jewellery retailer in the Middle East, said it is in 'the final stages of negotiations' to solidify a framework to restructure Dh3bn worth of debt.
"Negotiations are progressing well with respect to the facility agreement to be entered into with its bank lenders in relation to the restructuring of such bank lending facilities and the final outstanding points are expected to be resolved shortly," according to a filing made to its shareholders on the Nasdaq Dubai website.
Damas is trying to reach an accord with the Abdullah Brothers Group, two companies Damas Real Estate and Damas Investments and its twenty bank creditors and lenders to sign a debt restructuring deal of more than Dh3bn.
The publicly listed retailer has struggled to recover since October last year, when its then-chief executive, Tawhid Abdullah, stepped down from his post after disclosing "unauthorised transactions".These Dh614m in deals included property investments such as a shopping mall in Turkey and about two tonnes of borrowed gold.
The Cascade Agreement, will provide the legal framework for the orderly liquidation and realisation of cash proceeds from the sale of the assets of the Abdullah Brothers Group. It is intended to maximise recoveries for Damas and its other creditors by allowing the assets of the Abdullah Brothers Group to be sold with their cooperation at the market value over a period of time.
Shares of Damas remained unchanged at 13 cents a share at 10:55am.
"Whilst there is no certainty that the Cascade Agreement will be signed, or signed in the form described above and in the announcement made by the company in September the terms of any final signed agreement will be reported to shareholders in more detail pursuant to the company's obligations," the statement said.