Dubai Debt Rescheduling Watch: Drydocks and Maritime World to Restructure US$1.7 Billion

GulfNews reports that there's a new board at Drydocks and Maritime World and that the Company is in talks with its banks to restructure some US$1.7 billion maturing this November.

The new board comprises Hamed Mohammad Mattar Bin Lahej, Ahmad Eisa Hareb Al Falahi, Khalid Ahmad Bin Turkiya, and Geoffrey Taylor.  Taylor will be CEO.

"We are going through a process of discussions with the banks to restructure our $1.7 billion loan ... Obviously the market changes which occurred significantly slowed down our ability to meet our original schedules," said Taylor.

"We are going through a restructuring process," he added.

Kuwait: The Myth of the Asset Purchase Solution

 Apple House II  Danny Bradury   

Creative Commons Attribution 2.0 Generic license

Muhammad Al-Itrabi over at AlQabas had a positively brilliant article with a rather longish title "Companies have misled the people and want to deceive them when they call for the government to purchase assets".

Trust me, the article is much better than the title.  And much better than this rushed translation.

From the opening sentence "Perhaps frankness is the missing link in the local crisis" to its final  one describing trash assets he's both funny and scathing.

He says that despite all the official rhetoric about purchasing assets, when you interview officials off the record, then you really obtain the true story - the refutation of the equivocation that confuses many. 

"What is behind the reluctance to embark on the purchase of assets when the Governor of the Central Bank and the team with him which was created to solve the crisis first began discussing this solution and then just as quickly abandoned it?"

Basically, the answer is that assets on offer are duff assets:

1. Minority shares in companies that are in trouble where the purchaser will have to invest additional funds to rescue them.
   
2. Only a very few good assets are on offer.  Due less to the desire of companies to hold on to good assets than the fact there aren't very many.  The KIA was only able to find a single orphan asset - Global's stake in Bank of Bahrain and Kuwait.  KIPCO allocated KD100 million for asset purchases and couldn't find a single one. 
3. He also notes that companies are hanging on to their few good assets as their way out of the crisis - generation of funds to pay debt service, presence provides a comfort to lenders, etc.
4. Of the assets for sale many are illiquid due to both the quality of the asset and the inability of purchasers to obtain financing.  These assets don't have a market and are unlikely to.
5. Toxic assets that are a burden on companies.  Purchased for exaggerated prices and financed with debt.  Thus placing heavy burdens on the owners balance sheets and requiring large expenditures.  In effect practically non existent assets.
   
6. Real estate composed of unfinished/undeveloped properties plus  القسائم parcels(?) coupons (?).   Anyone out there with the correct translation, please post.   Land in artificial islands where ownership has reverted or where millions are needed for development.
   
7. Undeveloped tracks of land in foreign countries "in the desert" as is the case in Dubai and Bahrain acquired at gigantic cost and financed with loans at high interest rates.  And which cannot be disposed of at any price.
8. Many of the prices are unrealistically high as though we were still in normal times and not where cash was dear.
9. Assets that don't fit with the guidelines (trends?) for government entity investment.
10. Duplicative assets (I suspect he's referring in part to the pattern of cross holdings among Kuwaiti "Groups") where one would have to buy a myriad of companies to get control of the assets.
11. Assets that consist of licenses to develop real estate or "empty boxes".

Well worth the read.

Gulf Finance House - Exits Bahrain Financial Harbor for US$40 Million and Land

GIH released two announcements on the Bahrain Stock Exchange today regarding its sale of its remaining stake of 49.88% in BFH Company to Emaar, a Bahrain based investment company with its headquarters in Bahrain.  You'll recall that at the end of 2007, GFH sold the buildings at the "heart of the BFH" to Emaar Bahrain for some US$425 million.  At that time they buyer was described as a 100% Bahraini owned company.

The second contained financial information - that the contract was for US$262 million and that GFH's cash return was US$40 million plus some plots of land in the area of the BFH, which the Bank (GFH) intends to sell piecemeal.  Presumably Emaar didn't think much of the land and so didn't want it.  I'm guessing that the sale contract was for US$262 million and in return for its BFH Company shares, GFH got the valuable land (US$222 million) plus US$40 million in cash.   Assuming that the land was transferred at book, then GFH would not have to recognize a loss on its sale.  But note this is all speculation.

Anyone out there got an update on ownership of Emar or Emaar? 

Saudi Arabia Capital Markets Authority Levies SAR7.3 Million Penalty Against Saudi Telecom Ex Director

The Saudi CMA announced today that a final judgment had been made in the case of Mr. Saleh Bin Mohammed Bin Saleh AlHajaaj.  He had been accused of insider trading in shares of Saudi Telecom on 19 and 20 December 2004.

The judgment consists of the following:

1. Payment to the CMA of the SAR7,249,365 representing the profits on his trading those two days from information he obtained as a member of the Board.
2. Payment of SAR100,000 in fines.
3. A three year ban from working for any company traded on the Saudi Stock Exchange (Tadawwul).

The Investment Dar - Restructuring Update: Moving Forward Toward Implementation

Quoting informed sources "close" the Creditors' Co-ordinating Committee ("CCC"), AlQabas reports that the advisors to the CCC will finish drafting the documents and all preparatory steps to begin implementing the restructuring just before the end of the coming week. And that these will be discussed with the Company in the weekly scheduled session Thursday.  Then implementing regulations to the restructuring plan will be submitted to the Shari'ah boards of TID and the CCC's advisors, Morgan Stanley as well as to Ernst and Young who the Central Bank engaged to review the Plan as required under the Financial Stability Law.  The article notes that the Plan will be submitted at a later stage to the Court for final approval and that this may help in getting final approval for the Plan leading to its implementation under the FSL.

AlQabas also notes that the CCC and TID have been discussing the Company's five year budget/financial plan (the period of the restructuring) and the details of repayment of the debts which is expected to begin this September once the Court approves the Plan and the Central Bank gives the "green light".  The article ends by noting the complicated and thorny condition of TID.

Dubai Debt Rescheduling Watch: Check-Up Time for Dubai Holdings

Photographer’s Mate 2nd Class Johansen Laurel - Picture in Public Domain

As Frank Kane at The National reports, DHCOG's financials are supposed to be out "later today".  And when released will give an insight into Dubai Holdings' financial position.

Moody’s, another one of the other large ratings agencies, still issues reports on DHCOG and recently issued a relatively upbeat assessment.

Nonetheless, Moody’s also confirmed that it rated DHCOG at “B1 and under review for downgrade”. 

Dubai Rescheduling Watch - Dubai International Capital

An article from The National provides a bit more detail on DIC's asset sales and remaining assets as well as its debt postponement.

Dubai Debt Problems - Someone Else's Fault

As per this article from The National

Dubai’s financial slowdown should be treated as a “special case” caused by the downturn in world trade and had nothing to do with the intrinsic productive capacity of the emirate’s economy, the UAE economic report says.

It seems the culprits were:

1. Banks and investors who didn't provide sufficiently long-dated capital to finance Dubai's real estate projects.
2. Foreign investors whose tremendous and apparently imprudent large capital inflows contributed to a form of the "Dutch" disease causing rampant inflation.
3. The global financial crisis.  Long time readers of this blog will appreciate our standing comment that this is a "global" and not a "Global" crisis.

Despite the short-sighted actions of these external parties, there are a few bright spots:

“The case of Dubai is ‘special’ also because very large investments have been made in its soft infrastructure, in both industry and government, which will have highly positive effects on the long-run development of the emirate,” the report says.

Besides being "special", and I trust you'll note the comparison here is Emirate-wide:

“But perhaps the biggest improvement in the overall productivity of the UAE in general, and specifically in Dubai, is the high efficiency of Dubai government agencies and departments which adopt first-best policies and international best practices …,” the report says.

 And

When these factors are recognised, it will position Dubai as one of the “most competitive cities in the long run”, the report concludes.

A hat tip to The National for helping to set the record straight.

Il Accuse! -- Former TIBC CEO Flees Bahrain

 Copyright Allied Artists

As reported in the Torygraph, Glenn Stewart has managed to escape from the apparently intolerable conditions he was being held under in Bahrain.  And has filed a formal charge with the International Court of Human Rights for false imprisonment designed to "deliberately inflict mental cruelty and torture". 

You'll recall (if you force yourself to think some rather unpleasant thoughts) that instead of being incarcerated in one of Bahrain's jails (by all means the sort of thing one should definitely avoid),  he was forbidden to leave the island while investigations into the collapse of TIBC were ongoing.  A sort of a modified house arrest with Bahrain as the house.  I guess the nearest comparative would be the French penal colony known as "Devil's Island" for more than one reason.

As he aptly put it, having escaped from these conditions of inhumane treatment, he is akin to a runaway slave.

If that weren't disturbing enough, from the article it's hard to avoid drawing the conclusion that the parties the Bahraini authorities have detained in connection with the collapses of TIBC and Awal believe they are victims of an unjustified conspiracy against them involving the Bahraini authorities, Ernst and Young, and Hibis and perhaps others.   The Bahraini Authorities would seem to include at a minimum, the Central Bank of Bahrain, the Attorney General of Bahrain and various investigative organs of the CID - though it is unclear whether other entities and individuals might be involved.  Nor how high up this goes!  I'd also hasten to add that it's unclear whether all these parties are alleged to have been active co-conspirators.  Or whether some of them may have been unwitting dupes.

According to direct quotes from Mr. Stewart it also seems this conspiracy has sinister undertones of persecution of "Westerners".

It's reports like this that make Abu Arqala wonder when justice will be done, if ever.

 

And finally a hat tip to Rupert Bumfrey, I would have missed this disturbing story if he had not reported it on his blog.  It doesn't seem to have been reported elsewhere yet. And that could, perhaps, be a chilling indication of the extent of this plot.  Or then again perhaps not.

Former Tamweel CEO Sentenced to Jail

Maktoob Business reports that a local court sentenced Adel Shirawi, former CEO, and three other officials to jail terms ranging from three to one years for financial crimes during their tenors at Tamweel.  Mr. Shirawi's sentence also includes a fine and the repayment of funds.

As noted, lawyers for three of the convicted parties (Messrs. Shirawi, Abdul Razak, and Khalthoum) said they would appeal the sentence.  There was no statement regarding the fourth party (Abdullah Nasser, former Deputy CEO), but presumably, he is appealing as well. 

Dubai Debt Rescheduling Watch: DIC Sells All Liquid Securities?

 
Here's a report from Maktoob Business that DIC has sold the last of its listed securities.

F for Fake: Another Look

Both images generated at Images Graphics.

And here's the error level analysis output for the first picture.

And for the second.

You can see the pattern on the sign differs from the rest of the pictures.

You Said What?: No, Really You Did? The "Nonsense" of Transparency

Indeed you did as this extract from a BIS publication shows.

Cross-border investment flows should be welcomed by recipient countries and encouraged by source  countries, as many countries in our Area need to set rules to enable the establishment of large projects for  the purpose of creating jobs. That will also enhance peace and stability on the national level, which will certainly improve the prospects for the regions in this vast Area. Any help by the World Bank in improving and unifying investment laws in addition to watching their implementation, will go a long way in achieving this important regional objective.

Sovereign Wealth Fund source countries should also be interested in investing in mega projects in the region for three reasons, as follows:
1. The Global Financial Crisis proved that investments through Industrialized Advanced Countries’ investment banks are not totally risk free.
2. There is a need within SWF source countries to safe guard flow of food imports at reasonable prices, and the possibility for incorporating companies as direct investment projects in countries in the region is a realistic possibility, when investment laws are enacted and maintained at international standards.
3. SWF source countries should be interested in the maintenance of social order, peace and stability in the regions of this Area.

Another reason that makes me think that SWFs from our region might change the flow of their direct investments, is that once we see the proposed Regulations re Sovereign Wealth Funds in the Industrialized Advanced Economies start being implemented, when economies in the West start doing well, more questions will be asked and more forms will become necessary to fill and more disclosure and transparency will be demanded. This behavior will signal that there is no strong need for foreign capital in the West, and that the political mood has changed.

Therefore, we might see gradual tightening of the scrutiny on capital flows from SWF countries, at one stage, especially funds that are destined for direct investment in certain companies.

Faced with all this nonsense, SWFs will certainly come to the conclusion that it is time to change strategy. This could make SWFs avoid direct investment in certain companies, or even avoid direct investment in all companies, and become more of passive investment vehicles in the West. As, SWFs have large sums to  invest, this might make them direct part of their investments to existing or newly created companies in the region. This situation, if it happens soon, will lead to creating a new regional developmental cycle.

Having an Identity Crisis?

Not sure who you are?

Well, the staff here at Suq Al Mal are continuously on the look-out for ways to help.

And  so we recommend this site as you attempt to address that question.

Of course, under our long standing policy, we don't make recommendations before thoroughly testing them in our state-of-the-art laboratory.  In keeping with this blog's policy, we don't use animals in the process. 

Rather Abu Arqala himself served as the test subject using some of the deathless prose from previous posts at Suq Al Mal.  

For the first time ever, we are able to report the results that on an informal basis AA is a male, but on a formal basis a weak male - with the explanation that he may be "European".   

Quel dommage! 

Though it wasn't immediately clear if that was an "old" or a "new" European.

Real or Fake? AMENDED

Dave Roberts published this picture over at TheGulfBlog.

And as you'll see there was some question about whether the picture was doctored.

Here's an interesting article analyzing a picture from Victoria's Secret showing how various tools are used to catch manipulations in pictures.

One of the tools that's available on the net is here.

I've had some outside technical help and am revising my earlier comment that the picture can't be analyzed on the Error Level Analysis site.  The problem was not the jpg format but the extraneous "bits" after the jpg in the link location.  Once removed, ELA performed an analysis.

Here's the results page.

While I am told this is not conclusive, you'll notice there are some areas on the sign where there is not random "noise" and this can be an indication of modification.  You'll notice these are  black.  Also something may have been done with the horizon above. 

You Said What?: Europe Can Learn Debt Management from Dubai

The following was reported in The National on 26 May.

European countries grappling with Greece’s financial crisis could learn from Dubai’s handling of its own debt problems, Sultan Ahmed bin Sulayem, the chairman of Dubai World, said yesterday.

The Dubai Government had intervened positively to provide a solution to the emirate’s debt problems and ensure no banks were in financial danger, Mr bin Sulayem said.

Dubai’s response to the financial crisis “should be adapted and learnt by the European countries in facing and tackling the crisis in Greece”, he said during a speech in Dubai yesterday.

From the Gulf News 27 May: "DIC Seeks Three-Month Repayment Delay".

"It is not a standstill. It is a request for extension of maturity,"  "The extension period would allow the implementation of a consensual longer term plan that would enable DIC to maximise the value of its business for the benefit of all its stakeholders,"

From the Financial Times 9 May:  Dubai Holding Advisers Engaged".

From Trade Arabia 26 May:  Dubai Holding Debt Restructuring "Risk Mounts"

"Dubai Holding is seen as the next subject of the emirate's debt restructuring programme which started with Dubai World in November, Saud Masud, head of research for the Middle East and North Africa at bank UBS, said in an interview.
'We believe Dubai Holding has roughly $15 billion in loans and bonds but this does not include any off balance liabilities arising from investor or end-user default on properties that have dramatically declined in 18 months,' Masud said."

From the Financial Times 27 May, Simeon Kerr reporting.

"Government cash flows remain meagre and analysts worry about its ability to raise more debt in the current environment. The banking system remains tight and in need of more liquidity to finance businesses and real estate projects.

UBS, for example, has said Dubai developers may need to raise another $11bn to finish semi-complete the real estate projects that haunt the city.

More hard work is necessary for Dubai to turn the corner."

If you decided to swim the Channel and had to be pulled out by the scruff of your neck in order to save your life, it's probably not a good idea to boast about your aquatic and athletic prowess.  If other members of your family are still flailing around in the water, it's probably an even better idea to avoid making similar comments about your family's skills.

The Curious Case of Al Thouraia Project Management Company WLL

This company has come up more than once in earlier posts on Global Investment House ("GIH"). 

Today it's time to take a closer look. 

Documents related to the Offering of AlThouraia can be found here. If that doesn't work, go to GIH's website.  Click on the Investor Relations tab. And then Global News. And then scroll down to 2 June 2008.

On 2 June 2008, with great fanfare GIH announced this KD180 million (US$630 million or SAR 2.5 billion) private placement.

Global announced the launch of Al-Thouraia Project Management Company's capital increase to KD180 million.  Al-Thouraia shall be utilized as a Special Purpose Vehicle (SPV) to invest its whole capital in Mazaya Saudi for Commercial Investment Company "Mazaya Saudi", which has been incorporated in the Kingdom of Saudi Arabia, and will be managed by Mazaya Holding Company "Mazaya". Global Acts as Lead Manager Al-Thouraia Project Management Company. Mazaya Saudi will operate as a real estate development company in the Kingdom of Saudi Arabia in order to capitalize on the opportunities available in the Saudi Arabian real estate sector, which is known to be a vibrant, growing and a lucrative market.  Mazaya Saudi will have a paid-up capital of SR2.5bn.  Mazaya Saudi shall conduct its business in accordance with Islamic Shari'a.

The Al Thouraia Summary outlined the attractiveness of the deal:

1. The market opportunity in Saudi. 
2. Strategic partners from Kuwait (Al Mazaya Holding) and Saudi (Abdullatif Alissa Group and Abdulaziz AlAjlan) plus some unnamed other strategic investors. As noted in GIH's press release above, to include Global itself. 
3. Excellent promised financial results: An IRR of 20.1% with solid cashflow -- an average dividend payout ratio of 60%. All achieved with moderate use of debt. Leverage ratio (no more than 35% at its peak). 
4. As well as the prospects of a liquidity enhancing listing on the Saudi Stock Exchange.
   

As is common, the "teaser" was accompanied by a Private Placement Memorandum . That link will take you to the copy posted on GIH's website. Surprising for a deal this size, this document is rather disappointing. Certainly, this is not as polished or professional as efforts by say Arcapita or Investcorp – two firms that I would expect GIH considers its peers. Perhaps, this is an earlier version which was revised later. Perhaps, this fundamentally reflects on the relative state of Kuwaiti regulations vis-à-vis some other GCC states?

As I read it, some items caught my eye. And some did not – that is, while I was expecting them, they didn't appear. 

The language and content of the Disclaimer need work and tightening. No doubt for some a technical quibble. But how one deals with the details is often a good indication of how one deals with the big picture.  The sort of thing a professional looks at to gauge the professionalism of his or her competitor.

The Term Sheet is rather short and incomplete. It should discuss all significant aspects of the deal, thus, providing the investor with a summary snapshot of the transaction in a single place. Besides the financial aspects, the identity of major parties, relationships/contracts among them, expenses and fees, length of the Offer including various steps, e.g., Offer Period, Allocations, Issuance.  And so forth

The Saudi Real Estate Market section does not discuss major items such as:

1. Laws and Regulations affecting a landlord's right and ability to increase rentals, including requirements, timing, procedures.
2. Commercial Issues:  The types of leases commonly used in the Kingdom, e.g., short or long term, escalation and early termination/cancellation clauses, whether operations and maintenance are separate from rental and what controls exist on increases in those critical cash outflows, etc.  The prevalence of rebates, decorating/finishing allowances to tenants, etc in the market.
3. Legal  Issues including mechanisms for challenges to rental and fee increases.  The ability, procedures and timing to evict of clients in breach, etc. 
4. Status of Mazaya Saudi.  There is a disconnect between the press release  ("has been incorporated") and the PPM ("being established").  A small point admittedly.  One simply explained no doubt.  But one wonders why the two weren't conformed.
5. Mazaya Holding Kuwait:  On Page 25 we learn that Mazaya Saudi will be "positioned to leverage on Mazaya Holding (Kuwait's) competitive market advantage". One that provides as we are told an "absolute advantage against competition". Certainly an enviable position to be in for this Kuwaiti Company not only in its home market but in what is for it the relatively new market of Saudi Arabia.  On Pages 26 -28, we get more details on the remarkable Mazaya Holdings. Formed in January 2004, it has 18 projects – of which it has completed a grand total of 4.  Of the 4, there is the 22 storey Global Tower, 32 villas in the Al Maha Project, the Al Roya Tower and 6 buildings in Dubai Healthcare City.  With these major accomplishments under its belt, it already enjoys an absolute advantage. Imagine its market position today. I'm guessing The Donald may be its latest apprentice. He's going to have to hustle to make the cut!  Or "You're Fired!"
6. Strategic Shareholders:  We also get a partial glimpse into the proposed shareholding structure. There's a list of three entities and the promise of other strategic investors. Perhaps for competitive or business confidential reasons the target holdings of each are not disclosed, though one might expect a prospective shareholder to wonder just what level of financial commitment these entities were going to make to the venture. 
7. Management:  There's no mention of the proposed members of the Board and CEO, their CVs and  perhaps more importantly what rights the investor has in choosing them. Recall that the investor is a unit holder in Al Thouraia and Al Thouraia is the shareholder in Saudi Mazaya. Al Thouraia as an entity will vote for the Board at Saudi Mazaya.  And that is precisely where the assets and cash generation take place.  As an aside, I'd guess (note that word) that this structure is used to "get around" Saudi Capital Markets Authority regulations on floating shares in Saudi companies. The share flotation is outside the Kingdom and therefore outside the CMA's regulations. 
8. Investor/Shareholder Rights: The usual enumeration of rights is missing. Such things as voting for the board and management, pre-emptive rights, requirements for the mandatory provision of periodic information (financials and otherwise) by the company as well as rights to demand information.  
9. Use of Proceeds: No separate page. No real discussion. From Page 7 we see there is a 1% placement fee and 4% marketing fee – both non refundable. Unclear if this means that GIH earns 4% even if it doesn't place the Units? 

Risk Factors are Jenny Craig slim. 

At one level to the point of being obscure. I'm really not sure but it seems that what is being said regarding Regulatory Risk is that the investor only has to fear regulations that are "vague and incomplete in nature". Would that mean that a clear imposition of tax or a definitive cancellation of a permit would therefore be benign? 

On the other hand there are some very clear and very true statements here, such as "Future Performance is Difficult to Predict". 

Mostly though  there's a lot that I would have expected to see but didn't.  And to be fair it's not only in GIH's PPM but in many many others issued not just in the GCC:

1. A clear statement that this is a speculative investment.  If you build it, they may not come.  This is after all spec real estate.  New developments. 
2. Contractor performance issues:  If you hire them they may not build on time or to specification. 
3. Availability and sufficiency of utilities and other public services. If you build it, you might not have electricity, water, sewage. And maybe no or  inadequate roads into the area. 
4. Re-letting rental risk. If they move out, you may get less rent from the new tenant.
5. A wider definition of competition – more than price:  quality, location, amenities, etc. 
6. Increases in operating and maintenance costs above rental increases. 
7. Structural Issues: an SPV in Kuwait stands between the investor and the income generating property in Saudi. Repatriation of funds. Potential tax issues. FX risks. 
8. Potential Conflicts of Interest:  I was surprised that this wasn't discussed since Mr. Omar El-Quqa, EVP at GIH, was also a member of the Board at Mazaya Holding. As we learn in this press release from July 2007, GIH then sold some 48 million shares in MH, but remained the second largest shareholder with 5.5%. Perhaps, between July 2007 and June 2008, there were further changes in shareholding. I didn't see anything on GIH's website, nor in its first three quarterly reports for 2008. But I may have missed something. Depending on the various stakes the proposed Strategic Partners might hold, it would seem that good form would require some contemplation of potential conflicts of interest.In any case, I suppose we can conclude that GIH saw no conflicts of interest nor any potential for them and so rest comfortably. At the end of 2008, GIH reported in Note 19 (a) that it owned 21% of Mazaya. Note this year end shareholding is well after the private placement. And it may have been a Victor Kiam moment. "I liked the razor so much I bought the company". Having done the deal and seen more evidence of MH's absolute advantage, it may have seemed like a good deal to reacquire some shares.  In which case perfectly innocent.
9. Material Contracts:  Summary of contracts with Mazaya Holding and any other parties.  All fees they are entitled to. On Page 35 we see they get an annual fee of 0.75% of paid up capital. KD1.35 million a year seems a rather small incentive for MH to apply its "absolute advantage" for Mazaya Saudi instead of for its own projects where it gets to keep the lion's share of the profits.
   

As we know GIH's placement effort was successful, though I couldn't find a press release on GIH's website. In fact there seems to have been almost total radio silence on the topic going forward. No mention in its 2008 annual of its great success in raising KD180 million. No press release. But then I may have not looked hard enough. The only GIH driven publicity I could find was a Bloomberg press item referring to advertisements that GIH placed in the Kuwaiti press in November 2009. Those trumpeted the fact that the Appeals Court had ruled it was not guilty in a civil case brought by a Japanese real estate firm regarding this transaction. There were, to be fair, the mandatory disclosures in GIH's financial reports.

Subsequent to the Offer, Al Thouraia placed roughly KD83 million with GIH in an "Islamic" transaction. A KD43 million deposit was also placed with a Kuwaiti bank. It's unclear to me why the funds were not immediately transferred to Saudi Mazaya. The 2 June 2008 press release was clear. "Al-Thouraia shall be utilized as a Special Purpose Vehicle (SPV) to invest its whole capital in Mazaya Saudi for Commercial Investment Company "Mazaya Saudi". And we're told on Page 24 that among its other activities, Mazaya Saudi would engage in Portfolio Management to "amplify shareholder value". No mention that Al Thouraia would do more than invest in Mazaya Saudi.  So shouldn't investments, if any, be in Mazaya Saudi's name?  The need for the funds in Saudi would seem to be manifestly urgent. The PPM (Page 24) discloses that Saudi Mazaya intended to begin work on three projects the first year. What better preparation for that than to get the funds in Saudi so they would be ready to be employed?

Perhaps, out of caution in a deteriorating market, the Board at Al-Thouraia decided it would be wise to keep the money in Kuwait where it would be safer. Perhaps just about the same time that the Board at Global MENA Financial Assets decided to park a significant portion of its assets and liquidity at GIH. Two rather strong market endorsements of the financial stability and security of GIH. A possible example of the market phenomenon known as "a flight to quality". And as I've noted before both entities were well positioned to well understand the financial condition of GIH.

Anyways let's follow the story using GIH's 2009 financials. 

1. Note 24 Page 57: It seems that a KD43.3 million AlThouraia deposit with a local bank was offset by that bank against a loan made by that bank to GIH. It's unclear to me what the legal basis for this offset is. Did AlThouraia guarantee the loan made by the bank to GIH? If not, how does the bank cross legal entity lines? Particularly, if GIH only owned about 83.36% of AlThouraia, what is the basis for stiffing the minority shareholders on the offset? There are all sorts of theoretical possibilities. And without picking one, let me just list some of them. Was the problem at the outset, when the deposit was placed? Perhaps, Kuwait doesn't have an ironclad "trust" law covering such deposits? And GIH placed the deposit with the bank "in trust for Al Thouraia" only to be rudely surprised later? Perhaps, there was an innocent clerical error about the name of the bank account holder when it was set up? Perhaps, the funds were mistakenly described as collateral? I'd appreciate a post from anyone out there with any insight on this. 
2. Note 25 Page 57: GIH acquired Al Thouraia through an asset swap – a non cash transaction. The assets exchanged are described on Page 58. It would be interesting to know if Al Thouraia's Articles of Association provided for Al Thouraia conducting the sort of activity that this asset swap implies. Or if Al Thouraia's shareholders either approved this step and/or amended the Articles. In any case through this transaction, GIH acquired control.  In so doing it added KD28 million or so to its cash balance, and removed KD83 million in borrowings (from Al Thouraia) from its balance sheet on consolidation. Note GIH did not necessarily obtain control over that cash. And it's likely that the KD83 million in debt remained a legal obligation of GIH.  In addition to these benefits, GIH's shareholding also implied the right to disconnect the feeding tube.
   

As we learn in Note 5 to the Company's 1Q10 financials, on 14 March 2010, GIH liquidated Al Thouraia recognizing a KD0.824 million accounting profit, while experiencing a KD18.725 million cash outflow. What explains this rather perplexing move by a Company desperately in need of cash to pay hungry creditors? The liquidation extinguished GIH obligations in the amount of KD125.6 million. The rationale for KD18 million tradeoff is suddenly a lot clearer. 

It also closes the book on Al Thouraia. A story which GIH no doubt wishes to forget as well hopes that its clients and the market will as well.

As indicated by the title, a curious case indeed.  And one subject to many interpretations.

Gulf Finance House - Resumes Trading After Providing Market Critical Information as Determined by KSE

Yesterday the KSE suspended GFH from trading because it hadn't published the results of its Board Meeting.

[8:54:42]  ِ.وقف التداول باسهم (تمويل خليج) لعدم تزويدنا بنتائج اجتماع مجلس الادارة ‏

يعلن سوق الكويت للاوراق المالية انه قد تم وقف التداول باسهم بيت التمويل ‏

الخليحي (تمويل خليج) نظرا لعدم تزويدنا بنتائج اجتماع مجلس الادارة وسوف

يستمر الوقف لحين موافاتنا بنتائج اجتماع مجلس الادارة .‏

Today GFH published the results of its Board Meeting.  

With the following critical information supplied, trading in GFH's shares can begin again:

1. The Board met on 25 May.
2. It held positive discussions concerning the condition of GFH in the market.
3. The Board encouraged the executive management to continue its strategy of diversifying income in the fields of construction and the development of financial institutions in the MENA region.
4. The management noted its continuing efforts to sell assets according to what had been announced to the market earlier.
5. The Board discussed and roundly condemned the many rumors circulating in the market.
6. The Board and the management are focused on strengthening the bank and expending every effort to achieve the best results for shareholders and investors.

And at roughly 10:20 this morning (Kuwait Time), GFH's shares resumed trading with this critical information in the hands (and no doubt the minds) of traders and investors.  I guess the KSE is still smarting from having been called out for past lackadaisical supervision.

[10:9:17]  ِ. نتائج اجتماع مجلس ادارة بيت التمويل الخليجي ‏
يعلن سوق الكويت للأوراق الماليه أن بيت التمويل الخليجي أفاد بالكتاب ‏
التالي نصه :‏
أن مجلس ادارة البنك قد اجتمع يوم الثلاثاء الموافق 25-مايو-2010 و عقد
مباحثات ايجابيه حول وضع بيت التمويل الخليجي في السوق . و قد شجع
المجلس ادارة البنك على مواصلة استراتيجية تنويع الايرادات من خلال ‏
سجل البنك الحافل في مجال انشاء و تطوير المؤسسات الماليه في منطقة الشرق
الاوسط و شمال افريقيا ، كما أوصى الادارة بمواصلة جهودها تجاه مبيعات
الاصول وفقا لما تم ابلاغه للسوق من قبل .‏
و قد ناقش المجلس و ندد بالاشاعات المغرضه الكثيره التى تم تداولها مؤخرا ‏
في السوق و مازال مجلس ادارة البنك و فريق الادارة يركزون  على دعم
البنك و بذل كافة الجهود الممكنه لتحقيق أفضل المصالح للمساهمين
و المستثمرين .‏
و عليه سوف تعاد الشركة الى التداول بعد عشر دقائق من نزول الاعلان .‏

Lulu (Pearl Real Estate): 3Q09 Year To Date Losses of KD6.8 Million

Pearl released its 30 September 2009 figures today (announcement below in Arabic).  Total equity as of that date KD12.1 million.

The lengthy text following the numbers details comments made by the auditors regarding the validity of the going concern assumption.

1. You'll note a figure of some US$727.7 million (KD207.9 million).  This relates to a derivatives transaction with a local bank.  
2. It wasn't possible to determine the fair value of some KD9.1 million in assets.
3. The rest deals with missing financial information from subsidiaries.
4. That the Chula Vista Project (California) is being liquidated.  No interim report from the liquidator.
5. That some of the data in the Company's report on subsidiaries is based on management prepared financials.

For those that don't know Pearl is a long established Kuwaiti real estate company founded some time in the mid to late 1970's.   Here's a link to its page at the KSE.  There's something not right (even for Kuwait) in the shareholding numbers which as given add to over 100%.  In any case the Government Debt Settlement Office appears to own somewhere over 40% and AlZumorrodah Holding over 50%.

[14:28:59]  بلغت (خسارة) (لؤلؤة) (6.7) مليون د.ك لل9 اشهر المنتهية فى 30-09-09 ‏
يعلن سوق الكويت للأوراق المالية أن مجلس ادارة شركة لؤلؤة الكويت العقارية ‏
ِ(لؤلؤة) قد اجتمع يوم الاربعاء الموافق 27-01-2010 ، واعتمد البيانات ‏
المالية المرحلية للشركة للفترات المنتهية فى 30-09-2009 ،وفقا لما يلي:‏
نتائج اعمال الشركة: ‏
الفترات الحالية:‏
البند                 فترة الثلاثة اشهر                 فترة التسعه اشهر
ِ                    المنتهية فى 30-09-09      المنتهية في 30-09-09 ‏
ِ الربح (د.ك)                (1.992.796)                (6.777.216)‏
ربحية السهم(فلس كويتي)     (7.92)                        (26.95)‏
اجمالي الموجودات المتداولة   ---                      21.728.238‏
اجمالي الموجودات             ---                      57.691.226‏
اجمالي المطلوبات المتداولة    ---                      41.681.875‏
اجمالي المطلوبات              ---                      45.561.718‏
اجمالي حقوق المساهمين       ---                      12.129.508‏
بلغ اجمالي الايرادات من التعاملات مع الاطراف ذات الصلة مبلغ 1.131.344 د.ك
بلغ اجمالي المصروفات من التعاملات مع الاطراف ذات الصلة مبلغ 0 د.ك ‏
الفترات المقارنة:‏
البند                 فترة الثلاثة اشهر                 فترة التسعة اشهر
ِ                    المنتهية فى 30-09-08      المنتهية في 30-09-08 ‏
ِ الربح (د.ك)            (6.984.020)               5.090.363‏
ربحية السهم(فلس كويتي)      (27.77)                    20.23‏
اجمالي الموجودات المتداولة   ---                      47.387.029‏
اجمالي الموجودات             ---                      85.095.325‏
اجمالي المطلوبات المتداولة    ---                      45.470.223‏
اجمالي المطلوبات              ---                      50.748.724‏
اجمالي حقوق المساهمين       ---                      34.346.601‏
علما بان تقرير مراقبي الحسابات يحتوي على اساس النتيجة المتحفظة التالية:‏
ِ1-كما هو مبين فى ايضاح رقم (18) حول المعلومات المالية المرحلية المجمعة ‏
المرفقة قامت شركة لؤلؤة الكويت العقارية بالدخول فى معاملات مشتقات مالية ‏
مع احد البنوك المحلية،وقد قام البنك بتقييد مبلغ 727,668,040 دولار امريكي ‏
على حسابات الشركة ،ان اسس احتساب هذا المبلغ غير متاحة لنا وحتى تاريخ ‏
اصدار المعلومات المالية المرحلية المجمعة المرفقة لم يتم التوصل الى حل ‏
لهذا الامر .ولا يمكن حاليا تحديد نتيجة هذا الامر .‏
ِ2- ولم يكن من الممكن تحديد القيمة العادلة ‏لاستثمارات متاحة للبيع بمبلغ ‏
ِ9.053.115 د.ك، ‏لعدم توافر قيمة عادلة ‏كما فى تاريخ بيان المركز ‏
المالي المرحلي المجمع المكثف .‏
ِ3- لم ‏تقم شركة لؤلؤة الكويت العقارية - ش.م.ك (مقفلة) باحتساب حصتها من
نتائج اعمال شركاتها التابعة (بيرل اوف اتلانتا،بيرل اوف فرانس)‏
ِ(سبورتنج ريل استيت)‏ (يونيفيرسال يونايتد رييل استييت كونسولتانسي)‏
ِ(سكول رييل استييت)، و ذلك لعدم توفر معلومات ماليه مرحلية ‏
او بيانات مالية معدة من قبل الادارة .‏
ِ4- لقد تم تقديم طلب تصفية الشركة التابعة (شولا فيستا كابيتال)، وحتى تاريخ
اصدار المعلومات المالية المرحلية المجمعة لم يتم تزويدنا بتقرير المصفي.‏
ِ5- قامت ‏ شركة لؤلؤة الكويت العقارية - ش.م.ك (مقفلة)‏ وشركاتها التابعة ‏
باحتساب حصتها من نتائج اعمال شركاتها التابعة غير مجمعة، شركة نور ‏
لادارة المشاريع - ذ.م.م. وشركة لؤلؤة التعمير للتجارة العامة والمقاولات
ِ- ذ.م.م. بناءا على بيانات مالية معدة من قبل الادارة .‏
تأكيد على امر :‏
نود ان نشير الى الايضاح رقم 2(أ) حول المعلومات المالية المرحلية ‏
المجمعة المرفقة ، والذي يوضح قدرة شركة لؤلؤة الكويت العقارية ‏
ش.م.ك (مقفلة) على الاستمرارية .

Shabka Holding Reports 31 December 2009 Financials: Negative Equity of KD16.3 Million

Today the KSE had announcements on several Shabka Holding financial reports.  As you'll recall they were past due on these as far back as 31 March 2009.  Today it released four, the latest being 31 December 2009.  You'll notice from the press release that the FY 2009 financials were approved by Shabkha's Board on 15 February this year.  It's not clear what was responsible for the delay in issuance.

The headline numbers are a loss of KD13.5 million for Fiscal 2009 versus a loss of KD28.6 million in 2008.  And negative equity of  KD16.3 million at the end of 2009 as opposed to negative equity of KD8.7 million in 2008. Presumably there were KD5.9 million of increases in the fair value of investments.  

Readers of this blog are well aware of the usual practice in the area.  So while Shabkha doesn't appear to have issued a press release (I can't access their website), I am sure they would have noted the dramatic improvement in earnings and the robust nature of their investments which increased substantially. And it seems to me that operating for two years with negative equity is one demonstration of a proven business model - at least by local standards.

Shabka's auditors did note that there are doubts about the going concern assumption.  And that no adjustments had been made to the value of the assets to reflect the current situation.   In light of these facts and the inability to obtain sufficient data they disclaimed any opinion on the the Company's 31 December 2009 financials.

Shabka's Board also announced that it was recommending to shareholders that they not declare any dividends for Fiscal 2009.

Having lost much more than 75% of their paid in capital, it would seem that the Company would have been required under Kuwaiti Commercial Law to hold a shareholders' meeting to agree plans to fix the situation or to vote for dissolution.  That isn't addressed here.  Nor should it necessarily be addressed here.

[13:5:2]  مجلس ادارة (الشبكة) يوصي بعدم توزيع ارباح عن عام 2009‏
يعلن سوق الكويت للأوراق المالية أن مجلس ادارة شركة الشبكة القابضة
ِ(الشبكة) قد اجتمع يوم الاثنين الموافق 15-02-2010، واعتمد
البيانات السنوية للسنة المنتهية في 31-12-2009 .‏
وفقا لما يلي:‏
البند             السنة المنتهية في 31-12-09   السنة المنتهية في 31-12-08‏
الربح(خسارة)(د.ك)                 (13.518.904)      (28.583.572)‏
ربحيةالسهم (فلس كويتي)              (150.7)               (324.8)‏
اجمالي الموجودات المتداولة      563.499              7.483.980‏
اجمالي الموجودات               15.044.857          21.821.778‏
اجمالي المطلوبات المتداولة      28.263.814          27.441.875‏
ِ اجمالي المطلوبات               28.263.814          27.441.875‏
ِ اجمالي حقوق المساهمين        (16.295.984)         (8.697.124)‏
بلغ اجمالي الايرادات من التعاملات مع الاطراف ذات الصلة مبلغ 0 د.ك
بلغ اجمالي المصروفات من التعاملات مع الاطراف ذات الصلة مبلغ(128.027)د.ك
التوزيعات المقترحة :‏
قرر مجلس ادارة الشركة عدم توزيع ارباح عن السنة المالية المنتهية في ‏
ِ31-12-2009 .‏
علما بان هذه التوصية تخضع لموافقة الجمعية العمومية والجهات المختصة .‏
علما بان تقرير مراقبي الحسابات يحتوي على محدودية النطاق التالية :‏
تكبدت المجموعه خسارة بمبلغ 15.243.545 د.ك (2008: 28.938.566د.ك)‏
منها خسارة بمبلغ 13.518.904 د.ك (2008: 28.583.572 د.ك)‏
تتعلق بمساهمي الشركة الام للسنة المنتهية في 31 ديسمبر 2009، وكما في ذلك
التاريخ كان لدى المجموعه اجمالي خسائر متراكمه بمبلغ 44.159.781 د.ك ‏
ِ(2008 : خسائر متراكمه 30.640.877 د.ك) ‏وصافي عجز بمبلغ13.218.957 د.ك
ِ(2008 : عجز بمبلغ 5.620.097 د.ك).‏ وبالاضافة الى ذلك ،تأخرت المجموعة ‏
في الوفاء بالتزام الدين بمبلغ 28.135.787 د.ك (2008 27.441.875 د.ك).‏
لقد نما الى علمنا من ادارة الشركة الام انهم بصدد ‏تقييم عدة استراتيجيات
اتحسين الاداء التشغيلي للمجموعه والمركز المالي وكفاية الموارد المالية ‏
للمجموعة لكي تتمكن من متابعة اعمالها على اساس مبدأ الاستمرارية .‏
ليس من الممكن الان ان يتم تحديد المحصلة النهائية لهذه الاستراتيجيات.‏
إن الامور المبينه في الفقره اعلاه تشير الى وجود عدم تأكد ماديه مما يؤدي ‏
الى وجود شك كبير على قدرة المجموعه على متابعه اعماله على اساس مبدأ ‏
الاستمراريه، قد يؤثر هذا على صحة افتراض الاستمراريه الذي تم على
اساسه اعداد المعلومات المالية المجمعه . ان صحة افتراض مبدأ الاستمرارية تم
على اساسة اعداد البيانات المالية المجمعة تستند الى تحقيق نتائج ايجابية في
ِ الامور المبينه في الايضاح 2 ، ان البيانات المالية المجمعة المرفقة لا ‏
تتضمن اية تعديلات فيما يتعلق بتحقيق وتصنيف مبالغ الموجودات والتي
والتي قد تكون ضرورية اذا لم تتمكن المجموعة من متابعة اعمالها ‏
على اساس مبدأ الاستمراريه . في حالة عدم صحة افتراض مبدأ الاستمرارية ، ‏
فإنه يتعين اجراء تعديلات كي يبين الموقف الحالي فيما يتعلق بالموجودات
التى قد ينبغي تحققها بمبالغ تختلف عن المبالغ المسجله بها حاليا ضمن بيان ‏
المركز المالي المجمع . اضافة الى ذلك ، يتعين على المجموعة احتساب مخصص ‏
للمطلوبات الاضافية التي تنشأ. لم يتم اجراء اية تعديلات في البيانات ‏
المالية المجمعة للمجموعة فيما يتعلق بهذه الامور .‏
عدم ابداء الرأي :‏
بسبب التأثر المادي للأمر المبين في الفقرات السابقه ، لم نتمكن من الحصول
على الادلة المناسبة والكافيه لتوفير أساس لرأي التدقيق وبالتالي، فأننا ‏
لانعبر عن رأينا حول البيانات المالية المجمعة .‏

Global Investment House - Returns to Sound Principles of Investment, Corporate Governance, Asset Valuation and Strengthening of Management with New Competencies

As part of its campaign to repair its brand and image, GIH held a two day seminar /training session for members of the Kuwaiti press on how to read financial statements (clearly a very needed and worthy goal) earlier this week.  At the closing ceremonies in which the participants were presented certificates, both Ms. Maha Al Ghunaim, Chairperson and Managing Director, and Mr. Bader Al Sumait, CEO spoke.  Both AlWatan and AlQabas have articles in their 27 May editions.

Let's start with a quote from Ms. AlGhunaim - which incidentally was the headline used by AlWatan for its article.

مها الغنيم: «جلوبل» تعلمت من الدروس الماضية ورجعت إلى القواعد السليمة في الاستثمار والحوكمة وتقييم الأصول وتعزيز الإدارة بكفاءات جديدة

The above quote can be roughly translated as:

Maha AlGhunaim:  "Global learned from the past lessons and has returned to sound principles in investment, corporate governance, asset valuation, and strengthening of management with new capabilities."

Which I suppose we can take to be an admission that at some point it was operating with unsound or no principles in those rather key areas in running a business.  Sadly, the reason for that lapse wasn't addressed.  Or wasn't reported.  In any case it is, I suppose, comforting that this is a "return" rather than a "first encounter".

As you'd expect, both GIH's Chairperson and CEO sounded themes designed to put a positive spin on the firm, though frankly my head is still reeling from the quote above.

1. To my surprise I learned from Ms. Maha that the putting of GIH's assets into the Global Macro Fund and the Real Estate Company was designed to protect their value of the assets and preserve the rights of the shareholders.  Mistakenly, I had thought this was done to facilitate creditors' ability to seize the assets in case of a failure by GIH to perform.  You'll recall hat these assets (some US$1.7 billion equivalent) are pledged to the banks.  In the event of default, instead of having to go through the laborious and legally risky step of registering a host of individual assets in their names, all they need do is take the equity in the two companies.  Presumably, with documents of transfer already signed by GIH - whose shareholders confirmed the transfer and the restructuring in their Ordinary General Meeting.  So that all the legal steps apparently have been well covered.  In any case, when you're wrong, you're wrong and it's good to be set straight.
2. Global's asset management business is large - US$6 billion in assets under management - and the firm is at the top (literally summit) of the regional asset management cohort.
3. Global's research and analysis is rigorously impartial and professional.

There was also a tour d'horizon on local and international affairs to reinforce the image of expertise of GIH. 

1. There was some discussion on the crisis - global in nature.  You'll note that that's "global" not "Global".  Unprecedented distress requiring unprecedented government action.
2. Some criticism of the Kuwaiti Government's efforts to deal with the crisis.  Not enough done.  The USA's program was held up as a model.  The KG needs to start buying assets to alleviate the problems as clients wallets are empty and the banks sit on their liquidity.
3. A  prediction that some of the distressed Kuwaiti companies are probably going down this year.  Those that didn't face their problems with "courage".  I wonder who Ms. Maha might be  thinking about when she mentions courage.  Perhaps, Mr. AlMusallam? Mr. Al Janahi?
4. The loan market is likely to be tight and not improve before 2011.  
5. The Kuwaiti Government pumped a lot of money into the banks but they're not lending.  Rather they're asking the Government to issue bonds so they can employ their liquidity.  Considering all the excellent lending opportunities in Kuwait that the banks don't have, I guess this is surprising to some.
6. It will be wise to give listed firms time to get ready for the new Capital Markets Authority Law.  And the KSE should not try to be an interim CMA.   The experience in Egypt, Dubai, Oman and Saudi is good and should be studied. 
7. The Government's privatization scheme may founder on its desire to make a profit.  Conditions are not conducive to trading.  The Government should bear in mind the benefits to both itself and the private sector from privatization. 
8. The GCC states plans to intervene to prop up the Euro (and thus their foreign investments denominated in the Euro) were criticized.  Government money should be spent in Kuwait solving the crisis at home. 
9. Apparently, there is a rumor that she and Mr. Al Sumait are being considered for the CMA Board!  Though it seems that she and Badr have only one thought and that is to preserve and protect the rights of GIH's shareholders.  How very lucky that is!   I trust they saved a seat for Dherar.  Or Ali. 

Second Dubai Tribunal Case: Trinet v Nakheel

The National reports that Trinet, an outdoor advertizing company, has filed a claim against Nakheel for unpaid bills of roughly AED 10 million.

Trinet is under pressure from the RTA to pay and so is leaning on Nahkeel.

From the article, Trinet appears to be ready to compromise.

Great Moments in Finance: The Chocolate Bond

A sweet deal.

I'm ready to sign.

Do I call my broker?  Or the candy store?

Dubai as the MENA Financial Center

Another quote from The National.

Dubai demonstrated at the MENASA Forum in the city that it still has the self-confidence and ambition to be the leading financial centre in the region.

Self-confidence and ambition are of course two key ingredients to success.  Hard work, sound planning, disciplined execution are as well.  Coupled of course with a strong dose of realism.  The Financial Center?   Perhaps a financial center.

You Said What?: The Nonsense of More Transparency and Disclosure

As reported in The National.  One hopes erroneously.

"At the same time, Mr al Suwaidi said, increased regulations of sovereign wealth funds by the West may deter the funds from making foreign investment. “More questions will be asked, more forms will become necessary, and more disclosure and transparency will be demanded. Faced with all this nonsense, sovereign wealth funds will certainly come to the conclusion that it is time to change strategy.”"

Damas Executive Management Changes

From Nasdaq Dubai.

Damas International Limited (the Company) announced today the appointment of Anan Fakhreddin as Chief Executive Officer of the Company. Mr. Fakhreddin replaces Mr. Sanjay Kalsi, who held the position of Interim Acting Chief Executive Officer of the Company. Mr. Kalsi will resume his previous responsibilities as Chief Financial Officer of the Company.
Anan Fakhreddin is a member of the Board of Directors of Damas International Limited. He, until most recently served as the Dubai based Managing Director for Middle East and Turkey, at the World Gold Council. Previously Mr. Fakhreddin worked with the Diamond Trading Company (a De Beers group company) for nine years covering the GCC region. Mr. Fakhreddin started his career with American Express International and held the position of Regional Manager in Saudi Arabia. He holds a BA in Business Administration from Yarmouk University in Jordan.

"I am delighted to have taken on this role at one of the oldest and most significant retail companies in the region, at a time of renewal and transition," said Fakhreddin. "Damas has a rich heritage of excellence across all its business lines, and this is the legacy we will look to build upon. I look forward to join a team of highly specialized and motivated professionals to further enhance our product line and customer service channels, while identifying expansion opportunities in growth markets. I am confident that with the support and insight of my colleagues, we will continue to develop Damas as a global leader in jewellery retail.”