Damas suffers huge losses

The Dubai-based Damas Limited, the largest retailer of gold and jewelry in the region, has said that it would have to delay debt repayments besides restructuring its business for continuing operation in the market.

The firm is also said to have approach the Dubai Government-owned conglomerate Dubai Holding seeking a recoup of almost Dh300 million for meeting its financial needs.

The firm said, "Additional funding is required to ensure that the company can continue its operations and meet its financial obligations as they fall due."

Sales of the Nasdaq Dubai-listed firm declined despite the unprecedented rise in gold prices. It has been facing a serious liquidity problem on accounts of decline in sales besides requests by lenders for early repayment of gold loans. The group also picked up some investments, which did not prove financially viable for it.

Damas yesterday announced its financial results for last six months, which represents the bleeding financial position of the firm. It suffered a loss of Dh714.9m during the period despite healthy performance by its retail business.

Stocks of the firm fell 36 per cent on the bourses to close at 16 US cents.