Dubai Islamic Bank in offer for remaining 13.5% stake in Tamweel

The Tamweel office in Al Barsha is pictured closed to business in 2009. Paulo Vecina / The National

Dubai Islamic Bank has made an offer to buy the remaining 13.5 per cent of the Sharia-compliant mortgage lender Tamweel which it does not already own.

Dubai’s largest Islamic bank said that it was offering Tamweel shareholders Dh1.25 per share to buy the remaining stake in the company, which it did not purchase back in 2013 when it bought a majority 86.5 per cent stake in Tamweel and took the company private.

According to Bloomberg data which reports that there are currently 864.99 million Tamweel shares in circulation, at the offer price the remaining stake would be worth about Dh146.3 million.

The largest shareholders in Tamweel after DIB are listed as Amundi Funds Equity Mena and Deka Middle East & Africa.

The offer will be open for one month until it expires on April 30.

Like its key rival Amlak Finance, Tamweel was an immediate casualty of the 2008 global financial crisis when credit markets froze and the two were unable to access fresh sources of capital.

Both companies stopped issuing new loans and slashed staff numbers as the bottom fell out of the country’s property market and abortive moves were made to merge the two.

The merger plan was abandoned when Tamweel, which had been traded on the Dubai Financial Market when the crisis hit, was converted into a private joint stock company and delisted in 2013 after DIB acquired a majority stake in the troubled mortgage provider.

At the time the bank’s board approved plans to fully acquire Tamweel.

Protracted negotiations with lenders and large distressed legacy loan books have meant the lenders have not reaped the full benefits of the Dubai real estate market rebound over the past two years.

“This will provide another opportunity to those shareholders of the company who missed out on the previous offer by the bank,” DIB said in a bourse statement. “These shareholders now have limited options to exit following delisting and conversion of the company into a private joint stock company.”

The news comes as Amlak prepares to start trading again on the Dubai Financial Market after an absence of six years.

The rival Sharia-compliant mortgage lender, which is 45 per cent owned by Emaar Properties, announced last month that it was aiming to have its stock readmitted to the DFM for restart of trading this month after it completed a restructuring of US$2.7 billion worth of debt last August.

“Amlak is now well placed to resume normal business operations and work towards creating future value for our shareholders once again,” said the Amlak vice chairman Ali Ibrahim Mohammed last month.

However, with property prices expected to weaken, this year investors may see its return to the market as being two years two late.

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