Debt-saddled Middle East jewelry retailer Damas International said Sunday it had reached a «standstill» agreement with most of its creditors and was moving ahead with a restructuring plan, AP reported. The Dubai-based company did not specify the amount of debt it wanted to delay payments on, but local daily, The National, last week put the figure at about $872 million. «This is a significant, positive announcement, demonstrating the confidence of our bank lenders in the strength of the underlying business model of Damas, the leading retail jewelry company in the Middle East,» the company said in an e-mailed statement. «A restructuring plan is currently being developed by the company, which will be implemented at the end of the standstill period,» the company said without providing other details about the agreement or giving an indication about the duration of the standstill. The move offers a glimmer of good news for the family-run business which last week was fined by a Dubai watchdog for improper financial deals and lax corporate oversight. The penalties levied against the company were the most severe to date and came amid Dubai's efforts to shore up its business and investor-friendly image in the region after the global meltdown dried up credit markets and left a number of companies in the Gulf struggling to repay their debts. The sanctions included fines of $3.7 million, the resignation of the entire board of directors, voluntary bans on the three brothers who oversaw the business and requires them to make good on an earlier promise to repay nearly $100 million in cash and 4,277 pounds (1,940 kilograms) of gold improperly taken from the firm. Damas has estimated the total amount wrongly taken from the company at about $165 million, with the funds used to pay for real estate and other investments. The image of the emirate, one of seven semiautonomous city-states making up the UAE, took a particularly harsh pounding after Dubai's chief conglomerate and engine for growth, Dubai World, late last year announced that it was seeking a delay in repaying roughly $26 billion in debts. Dubai authorities last week unveiled a long-awaited restructuring plan for the beleaguered conglomerate, saying they would pump in $9.5 billion into Dubai World with most of the funds going to Nakheel, a key property development unit. The news was warmly welcomed by a market worried about the health of the company and of Dubai itself. The glitzy city-state is estimated to shoulder about $100 billion in debt, including that of its state-owned companies like Dubai World. In a filing posted Sunday on the Nasdaq Dubai Web site, Damas said an extraordinary general meeting for shareholders would be held on April 19 to elect new board members. -- SPA
