* Amlak reached restructuring deal following government cash injection and six years of negotiations
* “Super majority” of creditors have formally approved new business plan
* Changes will be in full compliance with central bank rules for Islamic finance companies
Dubai’s Amlak Finance said on Tuesday that it had renegotiated parts of a debt restructuring which the Islamic mortgage provider agreed with creditors following the local property market crash of 2008.
Amlak, in which Dubai’s biggest developer Emaar Properties owns a 45 per cent stake, reached a debt restructuring deal in 2014 following a government cash injection and six years of negotiations with creditors.
At the time, Amlak did not give the size of the debt being restructured, but bankers estimated it at roughly $2.7 billion.
In Tuesday’s statement, Amlak said a “super majority” of creditors had formally approved its new business plan.
Creditors agreed to waive a number of restrictive covenants, which included adjustments to restrictions to allow Amlak to expand its mortgage book, raise more funds and add new business, it said.
The changes will be in full compliance with central bank rules for Islamic finance companies, it said.
The 2014 debt restructuring allowed creditors to swap AED1.3 billion ($354 million) of their original debt into a “convertible instrument” to be redeemed over a 12-year period as Amlak sells some real estate assets.
The new business plan would help “the prospects of redeeming the contingent convertible instrument earlier than previously anticipated,” Amlak CEO Arif Alharmi said.
Other Dubai companies have also sought to revisit debt restructuring deals signed with creditors after the 2008 financial crisis in a bid to secure more favourable terms.
State-owned Dubai World received creditor backing in 2015 for a $14.6bn debt deal, a renegotiation of an agreement it had signed in 2011.