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Mon 2 Aug 2010 11:48 AM

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Ernst & Young warns on Damas' future

Dubai jeweller may face 'significant uncertainty' to operate its business in future, the firm's auditors says.

Ernst & Young warns on Damas' future
DEBT PLAN: A restructuring plan or debt standstill agreement is central to Damas future, the report said. (Getty Images)

Dubai's Damas may face "significant uncertainty" to operate its business if the jeweller is unable to execute its restructuring plan or extend a debt standstill agreement, the company's auditors said in a report on Monday.

"In the event that the financial restructuring plan is not signed as envisaged or the standstill agreement is not extended further, there could be significant uncertainty over the ability of the group to continue operating as a going concern," said Ernst & Young, in a letter published on the bourse's website.

Damas on Sunday said it made a full-year loss of AED1.91 billion after provisions and non-recurring charges of AED1.9 billion. The Dubai-based jeweller said in July it had extended to September 30 a standstill agreement with lenders on $872 million in debt.

Damas earlier this year replaced its entire board, was ordered by the local regulator to pay hefty fines and said it would restructure its debt after it accused its former chief of involvement in $165 million of "unauthorised" trades. (Reuters)

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