UAE’s Amlak in bank talks for $2bn restructure plan

The mortgage lender had debts of nearly $3bn as of March 2012

Struggling UAE Islamic mortgage lender, 45 percent owned by Dubai’s Emaar Properties, is in talks to restructure around $2bn worth of bank and government debt, two banking sources told the Bloomberg News Agency.

The firm’s total liabilities stood at nearly $3bn as of September 30, 2011, according to its earnings report on the Dubai Financial Market. In March 2012, the federal government cut its debt burden by US$1.1bn as part of efforts to revive the firm, which was one of the highest profile victims of Dubai's construction bust.

According to a Bloomberg report on Tuesday, the firm is in talks with five banks representing creditors to restructure up to $2bn in debt.

In November 2008, the UAE government unveiled plans to merge Amlak with rival Dubai mortgage lender Tamweel after the two firms were hard hit by the emirate's real estate collapse.

That plan was effectively ruled out after lender Dubai Islamic Bank raised its stake in Tamweel to 57.33 percent in September 2010, while the bank moved earlier this month to take over the mortgage lender entirely.

"The commission is keen to protect the rights of shareholders and the continuity of the company, while not exposing them to bankruptcy," UAE Economy Minister Sultan bin Saeed al-Mansouri said in March 2012.

"The government will not allow bankruptcies of companies, as happened in many European countries and the US, and the country is keen to give priority to the protection of the shareholders' rights and their interests and not expose to any risk."

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

NOTE: Comments posted on arabianbusiness.com may be printed in the magazine Arabian Business

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

All comments are subject to approval before appearing

Further reading

Features & Analysis
A humbler Qatar still wants to punch above its weight

A humbler Qatar still wants to punch above its weight

Qatar has acquired more than $335bn worth of assets around the...

Saudi Arabia spends money to make money

Saudi Arabia spends money to make money

Tour of Asia by Saudi Arabia's King Salman advances drive to...

Soft money: will cash transactions soon be a thing of the past?

Soft money: will cash transactions soon be a thing of the past?

The rapid digitisation of banking in the UAE is enabling robots...

Most Discussed
sponsoredTracking