Amlak’s Financiers Approve Restructuring Proposal

DUBAI, UAE 7 August 2014: His Excellency, Engineer Sultan Bin Saeed Al Mansoori, UAE Minister of Economy and the Chairman of the “Committee to Assess the Condition of some Public Shareholding Companies of the UAE” (“the Committee”) today announced that the financial and debt restructuring package for Amlak Finance PJSC (“Amlak”) has been approved by 100% of its 28 financiers.

Commenting on the deal, His Excellency, the Committee chairman stated: “We are very pleased that Amlak’s financiers have accepted the restructuring proposal. In close collaboration with Amlak’s management, “the Committee” has led the discussions and negotiations with the financiers over the last two years, ultimately achieving this amicable restructuring solution. The Committee expects the restructuring to be completed and fully implemented in 2014, allowing Amlak’s shares to be re-admitted for trading on the DFM in early 2015. The success of Amlak’s restructuring demonstrates the Government’s commitment to support the UAE’s financial system and its economy and to protect the public and commercial investors.”

As part of the restructuring package, which was developed in full observance of Sharia’a principles, Amlak will shortly make an initial payment to financiers of approximately AED 2 billion, with the remaining debt to be paid over a 12 year period. Amlak will also start repaying the UAE Federal Government’s liquidity support funds, over a 6 year period.

The deal has been structured so that financiers will swap approximately AED 1.4 billion of their original debt to a convertible instrument, which is to be fully redeemed over the next few years from Amlak’s real estate assets value growth monetization.

Also commenting on the approval of the restructuring proposal, Arif Alharmi, CEO of Amlak, said: “We would like to thank the UAE Government and “the Committee” and our financiers for their support and confidence in Amlak. We will be working closely with all our stakeholders over the next few months to implement the restructuring in order to return to market and we look forward to providing innovative products and improved services to our existing and future customers.”

Due to regulatory requirements for re-admission of share trading, shareholders’ approval at the AGM will also be required. The AGM is provisionally scheduled to take place in the first quarter of 2015.

Since its shares were suspended from trading on the DFM, Amlak has been focusing on restructuring its balance sheet and its core property financing operations in anticipation of returning to market. Amlak has also taken a number of austerity measures to tightly manage costs, delinquencies and liquidity over the past six years, including reducing its exposure to non-core real estate assets and strengthening its collection procedures to reduce delinquencies. In view of its stabilizing operations, Amlak started to offer mortgage financing again earlier this year.