Damas says it has repaid US$54m

The region's biggest jewellery retailer is working towards repaying its creditors.

Damas is seeking to recover hundreds of millions of dirhams in investments and loans it made worldwide. Above, Damas's jewellery workshop in Dubai.

Damas International, the Middle East's largest jeweller, has repaid Dh200 million (US$54.4) of loans and will pay off its remaining debt to lenders from operational revenues, the chief executive said yesterday.
The company last week completed a Dh3 billion debt restructuring with a group of banks that will see it repay loans of Dh1.1bn over three years and receive working capital of Dh1.9bn.
"Our financial position is safe and secure, we have the ability to repay the banks based on operational revenues, selling jewellery in our stores," said Anan Fakhreddin,the chief executive.
Damas also signed a cascade agreement last week that will see the three Abdullah brothers - Tawhid, Tawfiq and Tamjid - who previously ran Damas, repay Dh614m to the company and a further Dh1.2bn to a group of lenders. The cascade agreement will see a number of secured creditors repaid first through the sale of the Abdullah brothers assets, and as an unsecured lender, Damas will come next.
The brothers were the subject of the strictest disciplinary action in the history of the Dubai International Financial Centre in March last year for improperly withdrawing Dh365m of cash and nearly two tonnes of gold, valued at Dh250m, from Damas without shareholder approval.
"According to the facility agreement and the restructuring of our debt, Damas will have the ability to repay all the excess debt from operational revenues," Mr Fakhreddin said. "So all the extra money whether it's from the cascade agreement or exiting certain markets is not taken into consideration."
A divestment committee made up of representatives from the Abdullah brothers, banks and Damas will decide when and at what price the assets will be sold.
As well as the Dh614m owed by the brothers, Damas is also seeking to recover hundreds of millions of dirhams in investments and loans they made worldwide.
The brothers sealed many deals only with a handshake, which has obliged Damas to retain them as advisers as it tries to trace all their transactions.
As part of its efforts to recover these investments and loans, the company is restructuring its store portfolio in many countries and retreating from others to focus solely on its core business. "We are a jewellery retailer, anything that is in addition to that is ancillary," said Sanjay Kalsi, the jeweller's chief financial officer. "In terms of the cash position our biggest priority is to maximise recoveries so we were not too concerned with the length of time."
Damas was examining its joint venture with the Indian jeweller Gitanjali, Mr Fakhreddin said.
"There was a direction for a joint venture with a retail and a wholesale element but . I don't think we are convinced with our results in India . it falls way short of our expectations," he said.
One of the company's priorities is to boost sales in Saudi Arabia, where it recently bought 49 per cent of the shares in Damas Saudi Arabia, taking its share to 98 per cent.
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