Amlak, an Islamic mortgage provider, will be subject for debt restructuring very soon, Minister of Economy, Sultan Saeed Al Mansouri, told media on Thursday.
“A full-scale restructuring of Amlak debt could be imminent following the settlement with creditors,” he said.
“A committee is trying to reach an agreement with creditor and restructuring process will start immediately after getting the final consensus,” Al Mansouri added.
It has been reported that Amlak’s total liability stood at debt of around Dh7 billion ($1.9bn).
The restructuring committee is negotiating with creditors and will reach an agreement very soon. Al Mansouri said that Amlak is recovering as start generating profits in the end of 2012.
“This is a good signs that will help Amlak to resume its businesses,” he said.
In November 2008, the Government unveiled plans to merge Amlak with rival Dubai mortgage lender Tamweel after the two firms were hit by the global economic woes. That plan was effectively ruled out after lender Dubai Islamic Bank raised its stake in Tamweel to 57.33 per cent in September 2010.
This gave Tamweel the funding it needed to resume trading but effectively put an end to the plan to merge it with Amlak.