The Abdullah brothers, majority owners of jewellery retailer Damas, plan to sell some of their stake in the family business in an attempt to boost efforts to repay debt.
According to a filing with Nasdaq Dubai, where the Middle Eastern company first listed its shares in 2008, third-generation brothers Tawfique, Tawhid and Tamjid have appointed a financial adviser to help with the potential sale of a part of their 52% stake.
The filing said the brothers want to sell their holding for “no less” than $0.45 (€0.34) a share, more than twice the current market price. The move comes as the Dubai-based family-controlled group, famous for its solitaire collections and international brands such as Baraka and Roberto Coin, looks to recover from its significant debt holding.
Estimated to be around $200 million (€155 million), according to media reports, the liability was the result of restructuring in 2009 when it was found that the Abdullah brothers had used company funds for personal reasons.
Following a fine of $700,000 imposed on the brothers by Dubai’s financial regulator, the jewellery group underwent restructuring to use the family’s assets to repay Damas and its creditors.
The group can trace its roots back to 1907, when Mohammed Tawfique Abdullah, grandfather of the three brothers, began designing and selling gold jewellery to retailers in Syria. Tawfique’s son Taher joined the family business in 1955 and moved its operations to the United Arab Emirates.
Originally called Al Abdullah Jewellery Traders, the company was renamed Damas in the late 1970s when the third generation took over the group operations.
The firm had revenues of AED2.95 billion (€625 million) for the year ending 31 March 2011, while profits rose to AED53.3 million following a loss of almost AED2 billion the previous year.