Damas, the region's largest retailer of gold and jewellery, says it must secure a debt standstill and restructuring to remain in business.
The Dubai-based company will also seek to recoup almost Dh300 million (US$81.6m) from an investment unit of the Dubai Government-owned conglomerate Dubai Holding. After investing Dh294 million into the unit, Damas later discovered that its investment consisted entirely of Damas shares, which by then had a value of less than Dh75 million.
"Additional funding is required to ensure that the company can continue its operations and meet its financial obligations as they fall due," Damas said in its results statement yesterday.
Shares in the company, which had been suspended from trading on the NASDAQ Dubai since the end of last month, yesterday fell 36 per cent to close at 16 US cents after trading was reinstated following the results announcement. "We feel the management has reached a point of inflection whereby financial re-engineering is required to carry on as a going concern," Al Mal Capital said in a research note yesterday.
"We suspend target price and rating on the stock until the company undergoes restructuring and redefines its strategy for the future."
As the price of gold rose over the last year, sales at Damas declined. The decline, combined with a number of lenders requesting early repayment of gold loans, led to a serious liquidity challenge. The group has also made heavy losses on a number of investments.
In six-month results announced yesterday, Damas reported a loss of Dh714.9m for the period ending in September. Its underlying retail business remained profitable, with the company reporting gross income of Dh320m. But large write-downs of underperforming loans and investments pushed the company to a heavy net loss.
Tawhid Abdullah resigned as Damas chief executive on October 12 after disclosing that the company had made unauthorised transactions. The transactions involved at least 50 deals, including investments in the Angsana Hotel and Suites, twin 49-storey towers on Sheikh Zayed Road in Dubai. The investments also covered a shopping mall in Turkey and a stake in the Bupa Cromwell hospital in London, said a person familiar with the matter.
The Abdullah brothers, who are the majority shareholders in the company, have signed an agreement to repay in full, and in cash, the value of the transactions under review within 18 months.
The company has also written down the value of a large investment into Dubai Ventures Group, a unit of Dubai Holding.
Damas had lent Dh294m to Dubai Ventures, which was to be repaid by last August with an interest rate of 6 per cent. But on August 18, Damas signed an agreement with Dubai Ventures to convert the loan into an investment in the fund.
However, when Damas contacted Dubai Ventures to learn the value of the investment it was revealed that it was worth Dh73.5m and comprised only shares of Damas.
"Although discretion had been given to Dubai Ventures in respect of investment choice, the Board of Directors of Damas International Limited had not authorised Dubai Ventures to invest in shares of the Company," the Damas financial statement said. "The Board intends to dispute Dubai Ventures actions in this regard and will seek to recover the full amount due under the original loan facility agreement."
Dubai Group declined to comment yesterday.
Dubai Ventures issued a brief statement. "Dubai Ventures Group will not comment on the details of the interim report," it said. "We may, however, consider taking legal advice."
Dubai Ventures had been part of Dubai Group, an investment fund owned by the Dubai Holding, but it was merged into another division earlier this year as part of a wider restructuring of Dubai Group, it said in October. .
@Email:tgara@thenational.ae
bhope@thenational.ae
COMPANY%20PROFILE
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The specs
Engine: 2.4-litre 4-cylinder
Transmission: CVT auto
Power: 181bhp
Torque: 244Nm
Price: Dh122,900
The specs: 2019 Haval H6
Price, base: Dh69,900
Engine: 2.0-litre turbocharged four-cylinder
Transmission: Seven-speed automatic
Power: 197hp @ 5,500rpm
Torque: 315Nm @ 2,000rpm
Fuel economy, combined: 7.0L / 100km
About Proto21
Date started: May 2018
Founder: Pir Arkam
Based: Dubai
Sector: Additive manufacturing (aka, 3D printing)
Staff: 18
Funding: Invested, supported and partnered by Joseph Group
COMPANY%20PROFILE
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Squid Game season two
Director: Hwang Dong-hyuk
Stars: Lee Jung-jae, Wi Ha-joon and Lee Byung-hun
Rating: 4.5/5
Meydan racecard:
6.30pm: Handicap | US$135,000 (Dirt) | 1,400 metres
7.05pm: Handicap | $135,000 (Turf) | 1,200m
7.40pm: Dubai Millennium Stakes | Group 3 | $200,000 (T) | 2,000m
8.15pm: UAE Oaks | Group 3 | $250,000 (D) | 1,900m
8.50pm: Zabeel Mile | Group 2 | $250,000 (T) | 1,600m
9.20pm: Handicap | $135,000 (T) | 1,600m
Where to donate in the UAE
The Emirates Charity Portal
You can donate to several registered charities through a “donation catalogue”. The use of the donation is quite specific, such as buying a fan for a poor family in Niger for Dh130.
The General Authority of Islamic Affairs & Endowments
The site has an e-donation service accepting debit card, credit card or e-Dirham, an electronic payment tool developed by the Ministry of Finance and First Abu Dhabi Bank.
Al Noor Special Needs Centre
You can donate online or order Smiles n’ Stuff products handcrafted by Al Noor students. The centre publishes a wish list of extras needed, starting at Dh500.
Beit Al Khair Society
Beit Al Khair Society has the motto “From – and to – the UAE,” with donations going towards the neediest in the country. Its website has a list of physical donation sites, but people can also contribute money by SMS, bank transfer and through the hotline 800-22554.
Dar Al Ber Society
Dar Al Ber Society, which has charity projects in 39 countries, accept cash payments, money transfers or SMS donations. Its donation hotline is 800-79.
Dubai Cares
Dubai Cares provides several options for individuals and companies to donate, including online, through banks, at retail outlets, via phone and by purchasing Dubai Cares branded merchandise. It is currently running a campaign called Bookings 2030, which allows people to help change the future of six underprivileged children and young people.
Emirates Airline Foundation
Those who travel on Emirates have undoubtedly seen the little donation envelopes in the seat pockets. But the foundation also accepts donations online and in the form of Skywards Miles. Donated miles are used to sponsor travel for doctors, surgeons, engineers and other professionals volunteering on humanitarian missions around the world.
Emirates Red Crescent
On the Emirates Red Crescent website you can choose between 35 different purposes for your donation, such as providing food for fasters, supporting debtors and contributing to a refugee women fund. It also has a list of bank accounts for each donation type.
Gulf for Good
Gulf for Good raises funds for partner charity projects through challenges, like climbing Kilimanjaro and cycling through Thailand. This year’s projects are in partnership with Street Child Nepal, Larchfield Kids, the Foundation for African Empowerment and SOS Children's Villages. Since 2001, the organisation has raised more than $3.5 million (Dh12.8m) in support of over 50 children’s charities.
Noor Dubai Foundation
Sheikh Mohammed bin Rashid Al Maktoum launched the Noor Dubai Foundation a decade ago with the aim of eliminating all forms of preventable blindness globally. You can donate Dh50 to support mobile eye camps by texting the word “Noor” to 4565 (Etisalat) or 4849 (du).
Ticket prices
- Golden circle - Dh995
- Floor Standing - Dh495
- Lower Bowl Platinum - Dh95
- Lower Bowl premium - Dh795
- Lower Bowl Plus - Dh695
- Lower Bowl Standard- Dh595
- Upper Bowl Premium - Dh395
- Upper Bowl standard - Dh295
'Fantastic Beasts: The Secrets of Dumbledore'
Rating: 3/5
Directed by: David Yates
Starring: Mads Mikkelson, Eddie Redmayne, Ezra Miller, Jude Law
PROFILE OF SWVL
Started: April 2017
Founders: Mostafa Kandil, Ahmed Sabbah and Mahmoud Nouh
Based: Cairo, Egypt
Sector: transport
Size: 450 employees
Investment: approximately $80 million
Investors include: Dubai’s Beco Capital, US’s Endeavor Catalyst, China’s MSA, Egypt’s Sawari Ventures, Sweden’s Vostok New Ventures, Property Finder CEO Michael Lahyani
Company%20Profile
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Defending champions
World Series: South Africa
Women’s World Series: Australia
Gulf Men’s League: Dubai Exiles
Gulf Men’s Social: Mediclinic Barrelhouse Warriors
Gulf Vets: Jebel Ali Dragons Veterans
Gulf Women: Dubai Sports City Eagles
Gulf Under 19: British School Al Khubairat
Gulf Under 19 Girls: Dubai Exiles
UAE National Schools: Al Safa School
International Invitational: Speranza 22
International Vets: Joining Jack
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
Padmaavat
Director: Sanjay Leela Bhansali
Starring: Ranveer Singh, Deepika Padukone, Shahid Kapoor, Jim Sarbh
3.5/5
COMPANY%20PROFILE%20
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