Sep 30 2010 |
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Lender facing an uncertain future
Market speculation has emerged over the future of struggling Dubai-based mortgage lender Amlak .Earlier this week
Dubai Islamic Bank
(
DIB
) effectively took control of
Tamweel
by raising its stake in the debt-ridden lender.
That move put paid to a long-planned merger between
Amlak
and
Tamweel
. And yesterday, Zahed Chowdhury of Al Mal Capital, laid out options
Amlak
will need to consider if it is to resume lending and trade as a listed company.
"The options are to go after existing shareholders for money. Second is to try and find a deposit taking institute like a bank which can take up some of the stock," Chowdhury told 7DAYS.
DIB was probably the best bank in terms of balance sheet held for Tamweel ," warned Chowdhury.
Andrew Charlesworth, head of corporate finance advisory at Jones Lang LaSalle, also told 7DAYS that one way for Amlak to raise capital might be to sell off assets: "There are international groups out there that will buy these sort of portfolios. They are not going to pay full price, but that might be an option."
Amlak , with real estate investments including in Dubai's Discovery Gardens and Meydan Business Park, was unavailable for comment.
© 7Days 2010
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Comments By Our Users (1)
It is not clear exactly what Emaar intends for its $500m convertible bond issue but surely the refinancing of Amlak is one possibility. Certainly it was notable that Emaar's board meeting yesterday did not consider the sale of this stake. It is still potentially a very good business, though the link to a deposit-taking bank as a source of finance for mortgages would be a good fit. Emaar has a stake in Dubai Bank so that might be the logical place for Amlak if the Dubai Bank balance sheet can take it. Still the Emaar bond issue is good news, see: http://www.arabianmoney.net/banking-finance/2010/09/30/dubai-recovery-no-mission-impossible-as-1-25bn-bond-sale-opens/
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