Dubai's Amlak reaches 95% creditors on debt restructuring

Dubai-listed mortgage finance firm Amlak on Wednesday announced that it had reached a deal with 95 per cent of creditors to restructure the debt while talks with the remaining five per cent are underway.
Twenty seven creditors are involved in negotiations with 24 agreeing to the deal while talks with three are still on. The restructuring negotiations are expected to be complete in first-quarter 2020, it said.
"Reaching 95 per cent approval rate was challenging and pushed us to create innovative solutions to satisfy different type of creditors we are dealing with. As we work to complete the negotiations with the remaining creditors, I am confident that we will receive their approvals shortly," said Arif Abdulla Alharmi Albastaki, managing director and CEO of Amlak.
"We have already paid 42 per cent of our Islamic deposits liabilities relating to financiers and 92 per cent of our Islamic deposit liabilities relating to liquidity support providers," he said.
Amlak had earlier restructured its Dh10.2 billion investment deposits and settled Dh2.8 billion in cash. It has repaid Dh1.8 billion to financiers between 2015 to 2018.
"Unavailability of new funding at acceptable (being restructured company), results in high product pricing, adversely impact the competitiveness in the retail finance business. Forced exit of profitable investments in Egypt and KSA subsidiaries in a time-bound framework to comply with Central Bank Finance Companies Regulations 2018, impacts company's overall profitability and also restricts its ability to diversify the risk across different markets," the company said in a recent note.
The company is targeting to exit low performing high risk relationships and retain good performing relationships. It is also reducing exposure to real estate assets due to slowdown in property market.
It predicted Dh9 million net profit for 2020 but sees Dh19 million and Dh17 million losses for 2021 and 2022, respectively.
Its shares were down nearly three per cent at closing on Wednesday on the Dubai Financial Market.
- waheedabbas@khaleejtimes.com