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Sun 17 Jan 2010 08:06 AM

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Damas close to signing $1.08bn debt standstill - paper

Sources say jeweller is near to agreeing debt freeze to defer loan repayments.

Damas close to signing $1.08bn debt standstill - paper
DUBAI JEWELLER: Damas is reported to be close to agreeing debt standstill. (Getty Images)

Dubai jeweller Damas is reported to be near to signing a debt standstill agreement on AED4bn ($1.08bn) it owes, sources have revealed.

According to a report in the National on Sunday the firm is working towards an official debt freeze to defer its principal loan payments until May 31 but still accrue interest.

“The banks and the management are working together to restructure the debt because they believe the core business of the company continues to be sound,” a source told the paper.

The Abdullah brothers, the company’s majority shareholders, have begun liquidating assets outside of Damas to pay the company back the $165m used in “unauthorised transactions”, another source told the paper.

The brothers are reported to be considering selling personal assets to raise funds, including the sale of their yacht.

“The restructuring is well on its way and the family remains committed to repaying the company in full,” a statement by Damas said.

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