Dubai’s Emirates REIT has decided to retract its proposal to issue new sukuk certificates in exchange for its 2017 $400 million Islamic bonds as bondholder support for the move fell short of a majority.

Emirates REIT, a shariah-compliant real estate investment trust, will therefore continue to look to enhance its capital structure, Equitativa, which manages the trust said in a statement Monday.

Emirates REIT, which had $244 million in losses on rental assets, has offered to exchange the unsecured sukuk securities due in 2022 for new secured notes maturing in 2024 as a way of bolstering its balance sheet.

A group of bondholders--including local and international funds and banks—said to represent around 40 percent of the sukuk holders, had last month decided to oppose the offer.

Ratings agency Fitch last month downgraded Emirates REIT following its exchange proposal, saying it viewed the proposed debt exchange as a "material reduction in terms for lenders".

(Writing by Brinda Darasha; editing by Daniel Luiz)

brinda.darasha@refinitiv.com

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