Tamweel working with committee, holders on revamp

Islamic mortgage lender has been earmarked for a merger with rival Amlak.
Tamweel working with committee, holders on revamp
STOCK WATCH: Shares in Amlak and Tamweel have not traded since their suspension in 2008. (Getty Images)
By Agencies
Thu 03 Jun 2010 03:55 PM

Tamweel, an Islamic mortgage lender, is working with shareholders and a state-appointed steering committee on restructuring, it said in statement made on Thursday, according to the Bloomberg newswire. “The company will provide an update to the Financial Markets as and when specific information is made available in this regard,” it said in the statement made after a report that Dubai Islamic Bank may raise its stake in Tamweel.

Tamweel has been earmarked for a merger with rival Amlak.

In a statement on Wednesday, Dubai Islamic Bank said: "The bank is currently evaluating the possibilities of increasing its stake in Tamweel."

DIB may increase its one fifth stake in Tamweel, signalling a long awaited merger between the UAE's two largest mortgage lenders could be scrapped.

A government committee has been reviewing a merger between Tamweel and rival Amlak since 2008, and resolving the matter is seen as key to kick starting lending in Dubai's battered property market.

Raising its investment in Tamweel could make DIB more active in the mortgage market, Deepak Tolani, vice president of equity research at Al Mal Capital told newswire Reuters.

Tolani said: "Tamweel is still an okay company and if DIB can have more control over the company and its management, they may be able to control its future activities a bit more."

He added: "It helps them to an unlock an investment they have made."

Lending in Dubai's property market all but dried up, and has remained sparse, while investors awaited the recapitalisation of the emirate's two Islamic mortgage firms Amlak and Tamweel.

Shares in Amlak and Tamweel have not traded since their suspension in 2008, when the United Arab Emirates government said it intended to merge and restructure both.

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