Amlak assures investors as it prepares for return to Dubai bourse after long absence

Amlak Finance, which resumes trading next week after a six-and-a-half-year hiatus, has sent out a circular to reassure investors of its financial viability.

The Sharia-compliant home lender was among the biggest casualties of the collapse in Dubai house prices six years ago and flirted with bankruptcy. Since then, prices have recovered and the company is betting it will be able to put aside its troubled past and attract new customers.

“Amlak is confident that it will continue to generate annual profits, and intends to put itself back into a leadership position as a premier and specialised property financing provider in the UAE,” the company said in a statement to the Dubai Financial Market.

Since getting back on its feet, Amlak said, it has introduced a host of new products and services.

Amlak will start trading again on the Dubai Financial Market next Tuesday. Its re-entry comes at a time when trading on the DFM has slowed as investors wait on the sidelines to see how the decline in oil prices will affect the country’s economy. While Dubai’s main index is up 10.9 per cent this year, it is down 11.6 per cent over the past 12 months.

Amlak completed a restructuring of US$2.7 billion worth of debt last August, paving the way for the company’s shares to resume trading.

This month, Amlak reported a 62.5 per cent drop in first- quarter net profit to Dh6 million from Dh16m a year earlier. Revenue fell 15 per cent in the quarter to Dh105m because of its decreasing real estate portfolio, the company said.

The shares were last traded on November 20, 2008, at Dh1.02 each. Amlak, in which Dubai’s Emaar Properties has a 45 per cent stake, won shareholder approval last month to resume trading.

“From a financial point of view, Amlak is viable because its real estate portfolio now has been fully impaired to its fair value,” said Jaap Meijer, a managing director at the Dubai-based investment bank Arqaam Capital.

“It’s a solvent company after the restructuring and after the impairment of the real estate assets. Over time, Amlak has reduced its assets size substantially.”

Follow The National’s Business section on Twitter

Share This Post