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Dubai’s Amlak Finance offers lenders new deal to restructure $1.7bn debt

Amlak Finance, the Dubai-based Islamic mortgage provider, has proposed a new deal to restructure about US$2.7 billion in debt.

The Dubai-based company part-owned by Emaar Properties met lenders last month to present the deal, a spokesman confirmed in an e-mailed response to questions. If the deal is agreed, Amlak will make an initial 20 per cent down-payment to depositors worth about Dh2bn the spokesman said. The remaining debt to “commercial depositors” will be paid over 12 years, with about Dh1.4bn turned into a convertible instrument, he said.

“Following the meeting, depositors have been given two months to assess and accept Amlak’s restructuring package after which Amlak will be able to start repaying its debt and take the next steps to lift the suspension of the trading of its shares, which has been in place since 2008,” the spokesman said.

Amlak shares were suspended in November 2008 after the global credit crisis blocked the company’s access to borrowing and it negotiated with creditors. the lender reported a third- quarter loss of Dh40 million in 2011, the last time it disclosed financial results, according to filings on the Dubai Financial Market.

Emaar owns 45 per cent of Amlak, according to data compiled by Bloomberg. Shares in the developer of the world’s tallest tower gained as much as 8.2 per cent after Bloomberg reported the proposed debt deal.

Amlak’s liabilities were reduced by Dh4bn in March 2012 after it sold land and reached agreements with some creditors. A government committee restructuring the company decided not to liquidate to protect the rights of shareholders, the UAE Economy Minister Sultan Bin Saeed Al Mansoori said at the time.

PricewaterhouseCoopers is advising the creditor committee. Emirates NBD is chairing the committee, which also includes Standard Chartered, Dubai Islamic Bank, Abu Dhabi Islamic Bank, Dubai’s Department of Finance and the National Bonds Corp. KPMG is advising Amlak.

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