By Joanne Bladd
Founders owe $163.4m to firm in unauthorised withdrawals, debt to be paid by May 31
Dubai’s Damas International said Monday it has signed an agreement with its founding Abdullah brothers and creditors to allow the sale of certain assets owned by the founders.
The largest gold retailer in the Middle East said Sunday it had extended the payment date for AED600m ($163.4m) owed by the Abdullah brothers by a month to May 31, 2011.
“The cascade agreement provides the legal framework for an orderly liquidation of, and realisation of cash proceeds from the sale of, the assets of the Abdullah Brothers Group,” the company said in a statement to the Dubai bourse.
“The agreement allows for the realisation of assets at reasonable market values rather than at distressed sale values.”
Damas said in March that it reached a final agreement with all 25 of 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brothers owed the company a total of AED614m ($167.2m) that included AED256m worth of gold that the three brothers had withdrawn from the company.
Damas, which operates around 400 stores worldwide, said in April it had signed an agreement with all lenders to restructure around $817 in loans.
In December, the jeweller reported a six-month net profit of just over $1m, a major turnaround from a year of losses and controversy.
Damas last week said a subsidiary had acquired a controlling stake in its joint venture operation, Damas Saudi Arabia Company, for an undisclosed sum.