Abu Dhabi: Investors could welcome the commencement of trading of Tamweel stock once the government releases the details of the company's merger with Amlak, analysts said Sunday.

"There needs to be more clarification regarding the merger so investors can make their own decision whether to sell their shares or accept compensation," said Al Fajer Securities Partner Nabeel Farhat.

Chairman of the UAE's second-largest Sharia-compliant mortgage lender, Tamweel, Shaikh Khaled Bin Zayed Al Nahyan said yesterday his company plans to request the resumption of trading of its shares listed on the Dubai Financial Market once its final earnings report is released. In its preliminary earnings statement earlier this month it said it had incurred a Dh54 million loss in 2009.

Meeting

In statements made to the media, Shaikh Khaled said his company would also call its first general assembly meeting since trading in its stock was suspended in November 2008 after the government announced it would merge the lender with its competitor Amlak.

Amlak is the country's largest Islamic lender with Dh14.5 billion in assets as of September 2009.

Tamweel is currently undergoing restructuring in an effort to complete the merger by the end of the first quarter, as called for by the Ministry of Finance. Shaikh Khaled said late last month it was still possible to complete the process on time.

In December, the government set up a judicial committee to settle the accounts of Tamweel and Amlak with creditors and deal with legal disputes.

The two companies have been hit hard by the downturn in Dubai's real estate sector which has seen property prices decline by more than 50 per cent.

Analysts say the merger could see the government inject as much as Dh1 billion into the new entity to improve its financial standing and enable it to resume lending, as well as compensate Tamweel shareholders.

Transparency

"How much will investors in Tamweel be compensated as a result of the merger?" said Farhat. "There needs to be transparency on the part of the company so investors can decide for themselves."

In December, Moody's downgraded Tamweel two notches to Baa3 on concerns regarding the company's financials and delays and lack of information regarding the merger process.