Amlak in talks over $3.3bn funding gap - report

Mortgage lender's CEO says in discussions with banks and gov't, expects solution soon.
Amlak in talks over $3.3bn funding gap - report
By Thomas Atkins
Wed 24 Jun 2009 09:18 AM

Mortgage lender Amlak is in talks with banks and the government over a 12 billion dirham ($3.3 billion) funding gap and expects to find a solution soon, its chief executive was quoted as saying on Wednesday.

If confirmed, a $3.3 billion funding gap would mark Amlak, one of the biggest mortgage lenders in the Gulf, as one of the largest casualties of the financial crisis that has swept the Arab peninsula despite energy-export revenue and sovereign savings.

"Discussions directly with banks as well as through the Merger Steering Committee on a long-term sustainable funding plan for Amlak are on and we expect the results will be announced soon," chief executive Arif Alharmi was quoted as saying by newspaper Emirates Business.

Amlak was not immediately available to comment on the article. The company earlier in June had rejected a report that it had 13 billion dirhams in funding needs.

In the report, Emirates Business quotes Alharmi and refers to detailed documents, saying that the group had a net liquidity gap of 12.167 billion dirhams.

Amlak and rival Islamic housing lender Tamweel were both paralysed by the financial crisis and property collapse that hit Dubai in late last year.

Since then, their shares have been suspended and their fate under review by a federal committee charged with merging the firms with two other state-controlled banks.

Amlak and Tamweel would be recapitalised with money from the government and would not tap into bond proceeds from Dubai's $10 billion bond sale earlier this year, authorities said in April. (Reuters)

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