Amlak Finance aims for return to DFM trading after six years

Amlak completed a restructuring of US$2.7 billion worth of debt last August, paving the way for the company’s shares, suspended since 2008, to resume trading.

Amlak Finance shares are set to start trading again next month after an absence of six years.

The Sharia-compliant mortgage lender, which is 45 per cent owned by Emaar Properties, announced yesterday that it was aiming to have its stock readmitted to the Dubai Financial Market for restart of trading in April 2015.

Amlak, which yesterday reported a 22 per cent profit increase for last year, completed a restructuring of US$2.7 billion worth of debt last August, paving the way for the company’s shares, suspended since 2008, to resume trading.

The deal with 28 creditors broke the impasse that had hung over the UAE mortgage market since the height of the global financial crisis.

Amlak was an immediate casualty of the credit crunch in 2008 when it was unable to tap global credit markets to service its mortgage business. Protracted negotiations to merge Amlak with its rival mortgage lender Tamweel were finally aborted when the latter was taken over by Dubai Islamic Bank.

Reporting its financial accounts for the the first since 2008, Amlak said that profits for 2014 stood at Dh58.85 million, up from Dh48.23m the previous year, mostly driven by the loan restructuring.

By comparison the company, which has spent the past eight years slashing staff numbers and expenses but underwriting no new loans, reported net profits of Dh240m in 2008.

Total Assets fell to Dh7.3bn last year from almost Dh16bn in 2008.

The reduction included Dh6bn from amortization of the mortgage portfolio and almost Dh2.3bn from impairments losses recorded in 2014 on real estate and other corporate assets. With no new business to sustain it since 2008, revenues at the company also continued to decline.

Income from Islamic financing and investing assets fell 9.4 per cent to Dh368m last year from Dh406m a year earlier and fee income sank 69 per cent to Dh8.4m in 2014 from Dh27.8m in 2013. Amlak said that total revenues stood at just two-thirds of their 2008 level, while total operating expenses fell 45 per cent between 2008 and 2014 as the company implemented an austerity strategy for remaining staff.

“With the completion of the restructuring in November 2014, Amlak is now well placed to resume normal business operations and work towards creating future value for our shareholders once again,” said the Amlak vice chairman Ali Ibrahim Mohammed.

To win regulatory approval from the Securities and Commodities Authority to resume trading, Amlak must fulfil certain requirements including ratification by shareholders.

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