DUBAI Jan 3 Dubai's Amlak Finance
said on Tuesday that it had renegotiated parts of a debt
restructuring which the Islamic mortgage provider agreed with
creditors following the local property market crash of 2008.
Amlak, in which Dubai's biggest developer Emaar Properties
owns a 45 percent stake, reached a debt restructuring deal in
2014 following a government cash injection and six years of
negotiations with creditors.
At the time, Amlak did not give the size of the debt being
restructured, but bankers estimated it at about $2.7 billion.
In Tuesday's statement, Amlak said a "super majority" of
creditors had formally approved its new business plan.
Creditors agreed to waive a number of restrictive covenants,
which included adjustments to restrictions to allow Amlak to
expand its mortgage book, raise more funds and add new business,
The changes will be in full compliance with central bank
rules for Islamic finance companies, it said.
The 2014 debt restructuring allowed creditors to swap 1.3
billion dirhams ($354 million) of their original debt into a
"convertible instrument" to be redeemed over a 12-year period as
Amlak sells some real estate assets.
The new business plan would help "the prospects of redeeming
the contingent convertible instrument earlier than previously
anticipated," Amlak CEO Arif Alharmi said.
Other Dubai companies have also sought to revisit debt
restructuring deals signed with creditors after the 2008
financial crisis in a bid to secure more favourable terms.
State-owned Dubai World received creditor backing in 2015
for a $14.6 billion debt deal, a renegotiation of an agreement
it had signed in 2011.
($1 = 3.6726 UAE dirham)
(Editing by Jason Neely)