Three Abdullah brothers aiming to sell shares in wake of debt restructuring
The largest shareholders of Middle East jeweller Damas
International have appointed a financial adviser ahead of a potential sale of
some of their shares, the firm said in a regulatory filing on Wednesday.
The three Abdullah brothers - Tawfique Abdullah, Tawhid
Abdullah and Tamjid Abdullah - are aiming to sell the shares for no less than $0.45
each, the statement said.
Damas shares closed on Monday at $0.23 on the Nasdaq Dubai.
Following the initial public offering of Damas in 2008, the
holding of the three amounted to between 51-53.1 percent combined, according to
Damas was forced into a restructuring in October 2009 after
it was found that the three brothers - who were chairman, managing director and
deputy managing director respectively at the time of its listing in July 2008 -
had made unauthorised withdrawals worth AED614m ($167.17m).
A cascade agreement, whereby the three would repay the owed
amount over an agreed period through asset sales, was signed in May.
A debt restructuring worth $872m was signed with its 25
lenders, including Barclays and BNP Paribas, in March.
Damas is primarily involved in the business of trading in
gold and gold jewellery, diamond jewellery, pearls, watches, silver and
precious stones on a wholesale and retail basis.
Let me see if I understand this.
They own a company, raise cash to the value of approx usd 270 mio. The brotherers get perhaps usd 30 mio.They still keep over 52 pct of the company. Instead of fulfilling what was a stated aim in the IPO document.
They then take another usd 167 mio in gold and cash from the company. So from the 270 mio raised they take a total of about 200 mio.
Instead of being charged it was the board that got censored for bad governence. The brothers were merely fined and banned from the board of any DIFC company for 10 years.
The board (the one that was censored) then hires the brothers as consultants. The brothers still have 52% of the shares. They then manage to conclude a debt restructuring.
Now they want to sell the shares at about 100% above the market value.
I think I run my business the wrong way. I try and make my money using a built in profit margin.