• Dubai sharia financier Amlak Finance’s shares will resume trading on 2 June
  • Amlak restructured $2.7bn of debt in 2014

Dubai-based Amlak Finance’s shares will be traded on the Dubai Financial Market (DFM) from 2 June.

Trading was suspended in 2008 during the emirate’s real estate crisis.

The Islamic mortgage provider and real estate financier restructured $2.7bn of debt in August 2014, according to a statement to the DFM.

It reduced its total liabilities from AED13.8bn ($3.8m) in 2008 to AED5.5bn by the end of 2014. The firm’s assets also fell from AED15.8bn in 2008 to AED7.3bn in 2014.

Amlak recorded net profit attributable to its equity holders (after non-controlling interest) of AED59m in 2014 and AED3.7m in the first quarter of 2015.

A steering committee was established by the UAE cabinet under the chair of the Ministry of Economy, with representatives from other regulatory bodies, in 2009.

The committee supported Amlak in negotiations to reach an amicable restructuring solution with financiers. This allowed the company to avoid bankruptcy and keep the business going while restructuring.

It reduced profit rates payable to the financiers, and real estate purchase and payment commitments by AED2.5bn.

It took measures including the reduction of operation costs to save AED2.5bn, an AED2bn reduction in potential fair value losses, conversion of fixed developer payments to construction progress milestone payments and the cancellation of mortgages for on-hold projects based on mutual agreements.

MEED reported in 2013 that Amlak was in talks with lenders to restructure about AED7bn. A coordinating committee was in place to represent the lenders, chaired by the local Emirates NBD. Other banks involved in the restructuring included the UK’s Standard Chartered, Dubai Islamic Bank and Abu Dhabi Islamic Bank.

DFM, which is 31 per cent owned by a Dubai government investment fund, holds 45 per cent of Amlak. 

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