Prime Highlights:
- Amlak Finance is seeking approval from shareholders for selling its real estate finance portfolio and winding down the segment as a whole.
- The company also intends to dispose of significant land assets and reduce heavy accumulated losses.
Key Facts:
- A general meeting on June 30, 2025, has been proposed to approve significant proposals that include winding down the real estate finance segment.
- Amlak intends to offload plots of land in Ras Al Khor, with the deal worth AED 2.9 billion.
- The firm is set to offload AED 406 million in built-up losses through special and legal reserves.
Key Background
Amlak Finance, one of the UAE’s top Sharia-compliant home financiers, is making strategic moves to transform its financial structure by closing its real estate finance business. This follows after it has built up losses, its income from financing dwindling, and is compelled to shore up its financials before repayments of debt that are due soon.
The board of Amlak has convened a General Meeting on June 30, 2025, wherein shareholders shall decide on two significant matters: to sanction the sale of its real estate finance book and to use its legal and special reserves to offset its cumulative losses. In particular, Amlak intends to subject AED 307 million of its legal reserves and AED 99 million of special reserves to the reduction of its AED 406 million losses.
Alongside, Amlak has also started the process of disposing of land plots that it holds in Ras Al Khor. The board had already given its nod for this and is a significant transaction worth AED 2.9 billion. The proceeds from the sale will aid the company in lessening debt and strengthening its liquidity position.
The strategy of exiting the real estate finance segment involves selling existing finance contracts to other institutions or negotiating pre-termination with customers. This will enable the company to concentrate more on core financing business with minimal exposure to the volatility in the real estate market.
Despite the strategic restructuring, Amlak has shown some financial improvement. In the first quarter of 2025, the company reported a net profit of AED 28 million—up 4 percent from the previous year—on revenues of AED 76 million. However, financing income dropped by 35 percent, and the company implemented significant cost-cutting measures.
In the future, the June 30 meeting’s outcomes will play a determining role in Amlak’s road to recovery. If proposals are approved by the shareholders, the company will be poised to improve its financial position and fulfill its AED 1.4 billion debt obligations falling due by October 2026.
Read More: World Bank Warns of Weakest Global Growth Since 2008 in 2025 Forecast
