Damas announced on NasdaqDubai late this afternoon that a majority of its lenders had agreed to extend the standstill two months to give the company time to complete its rescheduling proposal.
29 Apr 2010 - 17:48:58
Damas International Limited (the Company) announces today that the Company has signed an extension to the standstill agreement signed with a majority of its bank lenders.
The standstill agreement which was due to expire on 30th of April 2010, has been extended for a period of two months in order to allow the Company to finalize its restructuring plan.
The Company is pleased to announce that a majority of its bank lenders have approved the extension which proves once again the confidence of the Company's bank lenders in the strength of the underlying business model of Damas, a Company spokesman stated.
I'm not sure that a standstill is really effective if only a majority of lenders have signed. All it will take to start a panic is if one lender break ranks.
I'm also not sure that extending the standstill proves anything except the banks feel it is the best way to maximize their recovery. As noted earlier, the UAE has fairly low scores among the GCC for recoveries in insolvency. And judging by the last minute timing, it seems that sentiment built "slowly" to a positive response to the company's request.
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