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Indian Diamonds' Biggest U.S. Buyer Files for Bankruptcy
By siliconindia
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Friday, 24 November 2006, 18:30 IST
Mumbai: One of the largest importers of Indian cut and polished diamonds, the U.S. based and privately owned Fabrikant has filed for bankruptcy protection as it is unable to pay off its debts, amounting to $363 million. With a current asset of $225.9 million, the company purchases diamonds from India in excess of $60 million annually, making it the largest buyer in the US.
It is approximated by the Indian industry insiders that of the total debts, the company will owe Indian diamond merchants close to $25 million approximately. The U.S. accounts for a third of the diamond and gemstone exports and these developments are further expected to hit a sluggish diamond exports season in â06. According to Gems and Jewelry Export Promotion Council figures between April and October â06, the total exports from India declined 17 percent from last year. Exports were to the tune of $6291.3m (Rs 28,744 crore), from last yearâs $ 7609.7m (Rs 33,129 crore).
Fabrikant is expected to keep its U.S. operations minimal until its financial restructuring is completed, which could take about a month. Indiaâs exports generally pick up in the October-December quarter for Thanksgiving and Christmas. This could be badly hit, if the payments are held up.