Wednesday, Jul 02, 2008
DUBAI (Zawya Dow Jones)--Dubai-based jeweler Damas International Ltd. said it raised $270.6 million in its initial public offering and will list on the Dubai International Financial Exchange, or DIFX, on July 8.
Damas sold 270 million shares, or a 28% stake in the company, to institutional investors at the lower price range of $1, the jeweler said in an e-mailed statement Wednesday.
The jeweler also has an over-allotment option for a further 4% of shares, which could increase the total proceeds by about $40 million.
The company said its market capitalization will be $969 million
"The introduction of new capital will ensure we can accelerate our growth plans, be it through organic store openings, investing in manufacturing operations or selective acquisitions," Damas chief executive Tawhid Abdullah said in the statement.
Damas will be the first retail firm to list on the DIFX, which has struggled to attract interest since its launch in 2005.
It is the first initial public offering to be completed on the DIFX since Future Pipe Industries, a Dubai-based fiberglass pipes manufacturer, withdrew its $554 million share offering in May.
Money from the offering will be used for expansion and to "fund selective acquisitions, investments and alliances that complement the Damas brand", the company said. The company will also use some of the proceeds to restructure existing debts.
Damas, which traces its roots back to 1907, is the largest jewelry retailer in the Middle East and operates more than 400 stores worldwide. The company has a trade network that spans the US, the UK, Lebanon, Thailand, Jordan, Maldives, Libya, Italy, India, Egypt and the GCC countries.
Revenues at Damas hit $965 million last year and earned a profit of $57 million. The first quarter net income was up 36 percent to $19 million compared to the same period in 2007, according to PK Dutta, the chief financial officer.
The stock will float at a price to earnings multiple of 12.7. Based on this multiple, Damas is priced at a considerable discount to Tiffany, the famous New York jeweler, which trades at a multiple of 20.
Credit Suisse Group and HSBC Holdings Plc were the joint global coordinators and joint bookrunners on the share sale.
By Mohammed Aly Sergie and Stefania Bianchi, Dow Jones Newswires; +971 4 3748043; mohammed.sergie@dowjones.com
Copyright (c) 2008 Dow Jones & Company, Inc.
(END) Dow Jones Newswires
02-07-08 0801GMT
