|16 July, 2019

Amlak says it is close to completing debt restructuring

Company tells Dubai exchange agreement with lenders should conclude by year-end

Image used for illustrative purpose. Skyscrapers along Sheikh Zayed Road, Dubai, UAE.

Image used for illustrative purpose. Skyscrapers along Sheikh Zayed Road, Dubai, UAE.

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Dubai-based home loans firm Amlak said that it has made "significant progress" in obtaining approval from lenders for a restructuring of its debts, adding that it expects "to sign a new agreement before the end of 2019.

In a statement to the Dubai Financial Market issued on Tuesday, the company said it had already announced that it was in talks with lenders to restructure its debts "to allow more flexibility to adapt to current market conditions and to allow the company to develop its business".

The company issued its statement following a story published by Bloomberg on Monday, which stated that Amlak was looking to reschedule payments on about $1.2 billion of debts. The report added that PwC was advising a group of around 28 creditors, most of whom have agreed to new terms.

Amlak announced in January that it had repaid 48 percent of a 10.2 billion UAE dirham ($2.7 billion) debt that was renegotiated in 2014 to be repaid over a 12-year period. It said the debt had restrictive covenants, which "given the passage of time and changes in market dynamics and macro-economic factors proved to be detrimental to the long term prospects of the company".

Amlak Finance is a home loans company in which developer Emaar Properties retains a 45 percent stake. The company declared a loss to equity holders of 266.3 million dirhams last year on revenue of 286 million.

The company said in a statement accompanying the results that it took an impairment charge of 206 million dirhams during the year on advances it had paid to developers for units in two projects, which had both been "delayed by a number of years" and for which a completion date was uncertain.

(Writing by Michael Fahy; Editing by Anoop Menon)

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