SHARJAH, 12 June 2005 — Damas, the UAE’s leading jewelry retailer and distributor, has increased its capital by 40 percent from 900 million dirhams to 1.421 billion through a private placement. Damas also plans to enter the Saudi market through a 250 million dirham joint venture with Amwal Al-Khaleej Co. of Saudi Arabia. The new venture will be called Damas Saudi.
The increase in capital was raised by a group of investors and now the equity is spread among Damas Chief Eexecutive Officer Tawhid Abdullah and his family (60 percent), Amwal Al-Khaleej Company (23.5 percent), Shuaa Capital’s private equity arm Shuaa Partners (9.5 percent), Al-Fahim Group (4.5 percent) and Al Nasser Investments (2.5 percent). Damas opted for private placement after it failed to reach an agreement over the certified value of the company. Damas had wanted the company to be valued at two billion dirhams and offer 55 percent of that to the public through an initial public offer.
Damas has now signed a shareholder agreement to expand the board of directors by inducting two new directors, Mohammed Ali Alabbar and Majid Saif Al-Ghurair. The basis of valuation used in the private transaction was the same as to the one employed last year when Damas considered a conversion to a joint stock company.
Amwal Al-Khaleej is an investment company based in Saudi Arabia and owned by Saudi and UAE shareholders. The size of its investment portfolio is SR500 million. The company focuses on acquiring sizable stakes in privately held companies within the GCC, aiming to eventually list such investments.
“The private placement generated tremendous interest and we received offers of commitments exceeding 1.5 billion dirhams, three times the amount we intended to raise,” said Abdullah, the Damas CEO.