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Wed 2 Nov 2011 05:10 PM

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Dubai's Damas says close to resolving $9.5m debt

Troubled jeweller 'in final stages' of negotiating to settle liability with third party creditor

Dubai's Damas says close to resolving $9.5m debt

Troubled Dubai-based jeweller Damas International said on Wednesday it was in the final stages of negotiations with third party creditors in a bid to resolve a AED35m ($9.5m) liability.

Without identifying the creditor, Damas said in a statement that the amount may be reduced by the proceeds of selling an asset which has been held as collateral by the creditor.

"The company is currently negotiating the settlement terms with a view to entering into a settlement agreement, but have not yet signed a binding agreement," Nasdaq Dubai-listed Damas added.

It added that it was hopeful that an amicable settlement agreement would be finalised and signed in the near future.

Last month Damas said it aims to sell some assets of its founders within three years as part of a AED600m ($163.4m) repayment agreement.

Damas said in May it had signed a repayment agreement with its founding Abdullah brothers and creditors that cleared the way for selling certain assets of the founders.

"We're hoping that (the assets can be sold) within three years," Damas CEO Anan Fakhreddin said.

Damas said earlier this year that it reached a final agreement with all its lenders and completed the restructuring of its $872m debt.

An inquiry last year showed that the Abdullah brothers owed the company a total of AED614m, which included AED256m worth of gold that the three brothers had withdrawn from the company.

Damas trades gold and gold jewellery, diamond jewellery, pearls, watches, silver and precious stones on a wholesale and retail basis.

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