DUBAI: Dubai mortgage lender Amlak has made a new proposal to creditors to restructure and extend repayments of about $2.7 billion of debt, aiming to end protracted talks over the last major hangover from the emirate's property market crash in 2008.
The sharia-compliant mortgage lender, in which Dubai's biggest developer Emaar Properties owns a 45 percent stake, proposed in June to make an initial down-payment of 20 percent, or about 2 billion dirhams ($545 million), a company spokesman said in a statement.
The remaining debt will be paid to lenders over 12 years, of which 1.4 billion dirhams would be swapped into a convertible instrument which will be repaid "over the next few years" from Amlak's real estate assets, the statement added.
The extended tenure, a feature of a number of restructurings in the emirate including the $25 billion Dubai World debt deal, is aimed at allowing asset values to improve so that they can then be sold to service debt repayments.
"Following the meeting, depositors have been given two months to assess and accept Amlak's restructuring package after which Amlak will be able to start repaying its debt and take the next steps to lift the suspension of the trading of its shares which has been in place since 2008," the statement said.
Amlak has been in talks over the debt with a six-member creditor committee, which includes commercial banks such as Emirates NBD and Standard Chartered and two government funds.
Its shares have been suspended since November 2008, when a credit crunch and market slump took hold. Earlier this year, the United Arab Emirates' economic minister said trading in Amlak would resume in the second half of this year.
Dubai's property sector has seen a sharp rebound in prices over the last two years, with some properties back to 2008 levels, which has helped improve the fortunes of Dubai state-linked entities that cut restructuring deals after the crash.
Dubai property developer Nakheel said last week it would repay all outstanding debt to creditors of about $1.5 billion, four years ahead of the schedule set down by its restructuring plan. (Reuters)