Dubai-based Islamic mortgage provider Amlak Finance made “significant progress” on securing new terms for $1.2 billion of debt and expects to reach an agreement by the end of the year.
Amlak is negotiating new restructuring terms with creditors that will “allow more flexibility to adapt to current market conditions” and boost growth, the company said in a statement on Tuesday after Bloomberg reported that it was close to securing a deal.
The company is asking creditors to reschedule repayments on debt over the originally agreed period that ends in 2026, people familiar with the matter said, asking not to be identified because the information is private. Most lenders have agreed to the new terms. PricewaterhouseCoopers LLP is advising a group of about 28 creditors in their negotiations with Amlak, they said.
Amlak, in which Emaar Properties PJSC holds a 45% stake, is restructuring its debt again after it agreed to new terms on $2.7 billion of loans in 2014. Delaying some of the repayments may help Amlak if and when the property market rebounds.
Property prices in Dubai, the Persian Gulf’s business hub, have slumped 27% since October 2014 amid excess supply and sluggish economic growth. The emirate will host the World Expo next year which it hopes will spark a recovery. Rising oil prices may also help boost economic growth and support demand.
Emirates NBD PJSC, the United Arab Emirates’ second-biggest lender, Standard Chartered Plc, Dubai Islamic Bank PJSC, Abu Dhabi Islamic Bank PJSC, Dubai’s Department of Finance and the National Bonds Corp. PJSC are among creditors.
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