Amlak seeks extension of maturity and reduction of $2 billion debt

Amlak Finance, the Islamic mortgage provider restructuring more than US$2 billion of loans, proposed to extend the maturity of the debt by 15 years and reduce the amount by 30 per cent, two people familiar with the matter said.

The Dubai-based company part-owned by Emaar Properties will make earlier payments if cash flow allows, said the people, asking not to be identified because the matter is private. The current business plan of Amlak, which is estimated to owe about Dh10bn, is to refocus on mortgage lending rather than developing properties, the people said.

The creditor committee, which is being advised by PricewaterhouseCoopers, should respond to the company with an indicative term sheet this month, one of the people said. Emirates NBD is chairing the committee, which also includes Standard Chartered, Dubai Islamic Bank, Abu Dhabi Islamic Bank, Dubai's Department of Finance and the National Bonds Corp. KPMG is advising Amlak.

Spokesmen for Amlak, ADIB, DIB, National Bonds, PricewaterhouseCoopers, KPMG and the Dubai Media Office did not immediately respond to requests for comment, while those for Standard Chartered and Emirates NBD declined to comment.

Dubai's property industry is recovering from a 65 per cent slump in home prices in the aftermath of the 2008 crash. The average price of a mid-range villa in Dubai increased 44 per cent in the year to April to the highest since November 2008, according to Cluttons data on Bloomberg.

* Bloomberg News