Jewellery group Damas International said on Tuesday it will shut its Italian unit, Stefan Hafner SPA, after its shareholders voted to wind down the loss-making unit.

Damas took over Stefan Hafner, which has flagship stores in Dubai and Moscow as well as locations in Madrid, Barcelona and London, in 2004 and held an 87-percent stake.

"The shareholders have decided to go for voluntary winding up in order to prevent further losses," Damas said in a statement.

Dubai Nasdaq-listed Damas shares were down 0.3 percent, having fallen as much as 13.5 percent earlier in the day.

The UAE firm said the Italian business recorded a loss of 4.2 million euros in its audited balance sheet of December 2008.

Damas said Stefan Hafner accounted for less than 2 percent of its total revenues in 2008/2009. The jeweller said it had booked adequate provisions against the losses in its fiscal year-end results in March, 2009.

Stefan Hafner also designs and distributes jewellery under the Iosi, Porrati and Nouvelle Bague trademarks. - Reuters