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.
"Out of the publicly-listed banks, where we have an insight into their balance sheets' strengths and weaknesses, I don't think anyone has got the stomach for Tamweel.
DIB was probably the best bank in terms of balance sheet held for Tamweel," warned Chowdhury.
Chowdhury added the government must take the lead, perhaps through Amlak's sponsoring shareholder, Emaar Properties, to provide support for the mortgage lender.
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
