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Thu 26 May 2011 12:12 PM

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Debt-hit Damas takes full control of Kuwait unit

Middle East’s largest gold retailer will take full control of 23 stores in the Gulf state

Debt-hit Damas takes full control of Kuwait unit

Damas, the jewellery retailer that is restructuring $872m of
debt, acquired a controlling stake in its joint venture operation, Damas

The largest gold retailer in the Middle East will take 100
percent ownership of its Kuwait operations, which includes 23 stores in the
Gulf state, the company said in an emailed statement Thursday.

The announcement comes just weeks after Dubai-based Damas
announced it had increased its stake in its Saudi joint venture to 98 percent,
for an undisclosed sum.

“This acquisition is part of our ongoing strategy to
strengthen our control in key markets,” Anan Fakhreddin, CEO of Damas
International, said in an emailed statement.

“The Kuwaiti market is a core market for Damas as it offers
a lot of potential for our business, and we believe that full ownership is the
best retail formula to maximise our results.”

The value of the acquisition was not disclosed.

The company, which is owed $167.2m in unauthorised
transactions from three members of its founding family, said in May it was
confident it would be able to meet its debt obligations.

Damas is expected to receive payment from its founding
Abdullah brothers, who withdrew $167.2m in cash and gold without shareholder
approval, within three years via a cascade agreement.

The cascade agreement, which allows for the liquidation of
assets belonging to the brothers, would focus mainly on the sale and
appreciation of UAE-based real estate.

Damas said in March it had reached a final agreement with
all 25 of its lenders and completed the restructuring of its $872m debt.

The company operates around 400 stores worldwide.

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