Emaar may book Amlak provisions

Emaar Properties may have to write off loans related to troubled Islamic mortgage provider Amlak, it said on Wednesday.

In a prospectus, Emaar said Amlak -- in which it holds a 48 per cent stake -- may need to restructure its debt obligations which would expose Emaar to "loan write offs and a decrease in the value of its investment."

"Amlak ... may need to restructure its debt obligations which may expose the guarantor to loan write offs and a decrease in the value of its investment," Emaar said.
"Should Amlak's financial condition worsen or fail to improve, (Emaar) may be required to make provisions in its financial statements for potential losses arising under the inter-company loans."

Analysts said the note issue was likely to help Emaar, the UAE’s largest listed property firm, refinance short-term debt obligations.

"This is a pretty landmark transaction. It wasn't so long ago that real estate and Dubai equalled a 'no-go'," said one banker familiar with the deal, who asked not to be named.

Amlak and rival lender Tamweel have not issued mortgages nor been traded on the market since November 2008.
On Sunday, Dubai Islamic Bank raised its stake in Tamweel to 57.33 per cent, effectively ending the prospect of a long-awaited Amlak-Tamweel tie up.

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