Amlak Finance renegotiates restructuring

04/01/2017 08:29 AST

Amlak Finance, a leading specialised real estate financier in the Middle East, on Tuesday announced that it has successfully renegotiated certain parts of its restructuring terms with its financiers.

In 2014, Amlak Finance successfully completed its restructuring, paving the way towards the company's shares being readmitted for trading on the DFM and the resumption of normal business activity.

In September 2016, Amlak approached its financiers to waive a number of restrictive covenants, 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. 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 super majority of the financiers, to allow greater operational capacity and ability for Amlak. 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. Specifically, the company can increase its business origination levels without limitation on an 'on and off balance sheet' basis subject to regulatory caps, depending on the market demands and the company's fund raising capacity. The new terms do not affect the repayment period or amounts, or profit payments to Financiers.

Since the original restructuring Amlak has, successfully serviced its debt, and generated net profits of Dhs136 million for the full year 2015 and Dhs 94 million for the first nine months of 2016. The Company has also paid Dhs 3.5 billion, which represents 42% of total debts outstanding in cash back to its financiers, and redeemed Dhs200 million, which represents 15 per cent of the Contingent Convertible Instrument within the first year of restructuring.

The Gulf Today