DUBAI, July 2 Dubai mortgage lender Amlak
has made a new proposal to creditors to restructure
and extend repayments of about $2.7 billion of debt, aiming to
end protracted talks over the last major hangover from the
emirate's property market crash in 2008.
The sharia-compliant mortgage lender, in which Dubai's
biggest developer Emaar Properties owns a 45 percent
stake, proposed in June to make an initial down-payment of 20
percent, or about 2 billion dirhams ($545 million), a company
spokesman said in a statement.
The remaining debt will be paid to lenders over 12 years, of
which 1.4 billion dirhams would be swapped into a convertible
instrument which will be repaid "over the next few years" from
Amlak's real estate assets, the statement added.
The extended tenure, a feature of a number of restructurings
in the emirate including the $25 billion Dubai World
debt deal, is aimed at allowing asset values to improve so that
they can then be sold to service debt repayments.
"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 statement said.
Amlak has been in talks over the debt with a six-member
creditor committee, which includes commercial banks such as
Emirates NBD and Standard Chartered and two
Its shares have been suspended since November 2008, when a
credit crunch and market slump took hold. Earlier this year, the
United Arab Emirates' economic minister said trading in Amlak
would resume in the second half of this year.
Dubai's property sector has seen a sharp rebound in prices
over the last two years, with some properties back to 2008
levels, which has helped improve the fortunes of Dubai
state-linked entities that cut restructuring deals after the
Dubai property developer Nakheel said last week it would
repay all outstanding debt to creditors of about $1.5 billion,
four years ahead of the schedule set down by its restructuring
($1 = 3.6730 United Arab Emirates Dirhams)
(Reporting by Praveen Menon; Writing by Nadia Saleem; Editing
by David French and Mark Potter)