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Amlak, Tamweel to Reveal Funding Solutions
Issac John / 10 June 2009
DUBAI — Two of the UAE’s largest cash-strapped mortgage banks, Amlak and Tamweel, said separately on Tuesday that the government has completed due diligence to assess their respective funding requirements and that they would reveal the scale of their financing needs once authorised to do so.
A federal government-appointed committee has conducted due diligence on both state-owned mortgage lenders, which suffered a severe financial squeeze when the property market collapsed. Amlak and Tamweel suspended operations late last year and are expected to undergo a major restructuring.
In separate statements on Tuesday, the two companies said a steering committee appointed by the Federal Government had studied their funding requirements. They issued their statements in response to a media report that claimed Amlak and Tamweel needed a combined total of Dh18.7 billion to resume their financing operations. Both companies, with a combined market capitalisation of about Dh2.5 billion and assets worth Dh25 billion, said the report was inaccurate.
“Amlak would like to stress that a full diligence exercise has been done by the steering committee, and they are fully aware of the requirements. We await the formal response from the committee in this regard,” the Islamic mortgage finance firm said on its Web site.
Tamweel, in a statement to Khaleej Times, said separately: “We do not agree with either the analysis or the conclusions of this media report. Tamweel has not provided any data or information for this report, other than what has been made available by the company through public disclosure to the financial markets.”
Tamweel said that the government-appointed steering committee, assisted by advisors and consultants, had conducted a full review of its needs. “The findings of their review, and their recommended solutions, have been presented by the committee to the government, and details of the solution will be released once the required approval is received.”
Tamweel Chairman Shaikh Khaled bin Zayed Al Nahyan said last month that the government was considering a restructuring plan for both lenders and that a decision about whether to merge Tamweel and Amlak would follow. He said the UAE government would pump money into the troubled companies as part of the restructuring.
One possible outcome, under review since November, is a merger between the two banks followed by their incorporation with Emirates Development Bank. The UAE Cabinet gave a go-ahead two weeks to a draft federal law for the establishment of Emirates Development Bank by merging Emirates Real Estate Bank and Emirates Industrial Bank into a single entity.
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