Damas secures facility agreement signatures from all bank lenders

By Caroline Salls

Pittsburgh, March 28 - Damas International Ltd. said all 25 banks, representing 100% of its bank debts, have signed the company's facility agreement.

According to a company news release, Damas is in the process of satisfying the conditions of the facility agreement and hopes to complete the process shortly.

"This is a significant milestone for Damas which reinforces 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," Damas chairman of the board Ibrahim Belselah said in the release.

"Damas is now working towards the implementation of an operational restructuring that will support the growth of this 100-year-old business as we enter a new phase in our corporate history.

"Under the guidance of the new board of directors and senior management, we have put in place robust internal controls to ensure compliance with effective corporate governance."

Bank lender steering committee chairman Vikram Reddy said in the release "on behalf of the steering committee, I would like to express our satisfaction with the signing of the facility agreement, which we believe reflects the best interests of all parties."

Damas said the facility agreement includes restrictions on the ability of Damas LLC to pay dividends before tranche 1 debt is repaid, which will be for a period of slightly less than 5½ years, but this period will be reduced by mandatory prepayments made by Damas.

The agreement also imposes restrictions on Damas' ability to change its board, constitutional documents or auditors if the changes would adversely affect the interest of the banks, as well as restrictions on the company having less than two bank-nominated directors while the steering committee remains in place.

"We are grateful to our bank lenders for their support, which will enable Damas to focus on its core operations," chief executive officer Anan Fakhreddin said in the release.

"This agreement further validates Damas' long-term business strategy, which is supported by our strong fundamentals, service excellence and product innovation.

"We are fully focused on strengthening our core operations and ensuring that Damas remains the most admired jewelry brand here in the UAE and the wider Middle East."

PricewaterhouseCoopers is acting as financial adviser. Ashurst LLP is acting as legal adviser to Damas, and Clifford Chance LLP is acting as legal adviser to the steering committee.

Damas is a Dubai, United Arab Emirates-based jewelry company.

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