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Emaar rules out option to convert $62.6m Amlak loan into equity
DUBAI — Emaar Properties on Thursday ruled out converting a Dh230 million ($62.6 million) loan to mortgage affiliate Amlak into equity, a day after it said it may raise its stake in the lender.
“There was an option earlier considered involving the longer term loan ... however, other better and viable options have been identified, which are now being considered and discussed,” Emaar, the builder of the world’s tallest tower Burj Khalifa, said in a statement on Thursday.
Emaar, which has a 48 per cent stake in Islamic mortgage lender Amlak, did not specify what the options were.
“The restructuring of Amlak Finance is being managed by a Committee, which is currently considering a number of options in respect of Amlak Finance PJSC and the interests of all the stakeholders,” the statement said.
“There was an option earlier considered involving the longer term loan of Dh230 million by Emaar Properties to Amlak Finance be converted into equity.
However, other better and viable options have been identified, which are now being considered and discussed,” it added.
Emaar’s chairman Mohammed Alabbar had said on Wednesday the United Arab Emirates’ largest developer may raise its stake in Amlak adding it had not decided by how much.
“Amlak is facing a lot of issues and as an analyst covering Emaar, I would prefer Emaar to write down its investment in Amlak and recover its debt,” said Majed Azzam, AlembicHC Real Estate analyst.
“If Emaar took control, it would have to sell assets and this isn’t something Emaar should be dealing with,” he added.
Alabbar said on Wednesday Emaar may take provisions related to Amlak in the first quarter of 2011.
“The management and the Board of Emaar will ensure that interests of its shareholders and stakeholders are considered in acceptance of any option as discussed by the Committee,” the statement said.
Shares in Amlak, and its rival Tamweel, have not traded since 2008 when the UAE government said it aimed to merge the two. Emaar’s shares closed 0.9 per cent higher earlier on Thursday.
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