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."For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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