Amlak's debt burden cut by $1.1b in bid to revive firm

Dubai: The federal government has cut Amlak's debt burden by $1.1 billion (Dh4 billion), the UAE Minister of Economy said yesterday, in the latest effort to revive the Dubai mortgage provider whose stock has been halted since 2008.

Sultan Bin Saeed Al Mansouri said a committee had "succeeded in reducing by some Dh4 billion of total debt owed by the firm and this in coordination with the federal government and the local parties concerned," according to a statement on the ministry's website.

Amlak's total liabilities stood at Dh11.01 billion as of September 30, 2011, according to its earnings report on the Dubai Financial Market.

In November 2008, the UAE government unveiled plans to merge Amlak with rival Dubai mortgage lender Tamweel after the two firms were hard hit by the emirate's property slowdown.

Take more time

That plan was effectively ruled out after lender Dubai Islamic Bank raised its stake in Tamweel to 57.33 per cent in September 2010, effectively rendering the mortgage lender a subsidiary of the bank.

Yesterday, Al Mansouri said resuming trade in Amlak stock will take more time.

"The commission is keen to protect the rights of shareholders and the continuity of the company, while not exposing them to bankruptcy," Al Mansouri said.

"The government will not allow bankruptcies of companies, as happened in many European countries and the United States, and the country is keen to give priority to the protection of the shareholders' rights and their interests and not expose to any risk."