Amlak Finance renegotiates restructuring terms

The firm has stated that all of its new restrictions will be in full compliance with the Central Bank Regulations for Islamic Finance Companies

This image is for representational purposes only.
This image is for representational purposes only.

Real estate financier Amlak Finance announced that it has successfully renegotiated certain parts of its restructuring terms with its financiers.

In 2014, Amlak Finance completed its restructuring paving the way towards the company’s shares being readmitted for trading on the Dubai Financial Markets (DFM) and the resumption of normal business activity.

Amlak approached its financiers to waive a number of restrictive covenants in September 2016, which included adjustments to certain restrictions to allow for the company’s mortgage book to be maintained at higher anticipated levels, funds to be raised under certain pre-agreed parameters, and restrictions on business origination to be removed.

All of these restrictions will be in full compliance with the Central Bank Regulations for Islamic Finance Companies, a company statement said.

These adjustments are essentially aimed to raise new business origination limits and the way Amlak can raise new funding to grow its balance sheet.

Amlak presented a new business plan to the financiers which has now been formally approved by a majority of the financiers, to allow greater operational capacity and ability for Amlak, it stated.

With this consent, Amlak will now have greater opportunity to grow its business in line with prevailing market conditions and better adapt and reform its long term strategy.

The new terms do not affect the repayment period or amounts, or profit payments to financiers, the company statement said.

Since the original restructuring Amlak has, serviced its debt, and generated net profits of $53.3m (AED136m) for the full year of 2015 and $25.6m (AED94m) for the first nine months of 2016.

The company has also paid $950m (AED3.5bn), which represents 42% of total debts outstanding of cash back to its financiers, and redeemed $54.4m (AED200m), which represents 15% of the contingent convertible instrument within the first year of restructuring.

Amlak’s restructuring proposal allowed financiers to swap $350m (AED1.3bn) of their original debt to a convertible instrument, which is to be fully redeemed by the end of the 12 year restructuring period from monetisation of Amlak’s real estate assets value growth. 

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