DLF Pro­mot­ers in Ad­vanced Talks for 40% Stake Sale in Rental Arm

The Economic Times - - Companies: Pursuit Of Profit - Kailash.Babar@ times­group.com

Mumbai: The pro­mot­ers of DLF are in ad­vanced dis­cus­sions with short­listed in­vestors to sell their 40% stake in the re­alty de­vel­oper’s rental arm, DLF Cyber City De­vel­op­ers (DCCDL), its man­age­ment said.

The fi­nal bids will be pre­sented to a com­mit­tee of in­de­pen­dent di­rec­tors for the eval­u­a­tion and mak­ing the fi­nal de­ci­sion, they told an­a­lysts on an earn­ings con­fer­ence call.

Ac­cord­ing to the com­pany, the progress on this trans­ac­tion has been a bit slow given its size and com­plex­i­ties. While dis­cus­sions are cur­rently on­go­ing, there are a few fac­tors that need to be sorted out and these in­clude the rental arm’s fu­ture devel­op­ment po­ten­tial of around 20 mil­lion sq ft. On Wed­nes­day, DLF said it ex­pects sales to re­main muted for the next few quar­ters. Weak sales and col­lec­tions will lead to op­er­at­ing short­fall of .₹ 750-1,000 crore per quar­ter. “The above shall re­sult in a tem­po­rary spike in net debt lev­els for which fi­nanc­ing is al­ready in place,” the com­pany said in its pre­sen­ta­tion to an­a­lysts.

On Tues­day, the de­vel­oper re­ported a 46% year-on-year drop in its third-quar­ter net profit at .₹ 98.14 crore. In­come from op­er­a­tions fell 30% to .₹ 2,058 crore. Its fi­nance cost dur­ing the De­cem­ber quar­ter rose 13% from a year ear­lier to .₹ 758.64 crore.

DLF re­vealed the plans of pro­mot­ers to sell their DCCDL stake first in Oc­to­ber 2015. The deal value was then es­ti­mated at .₹ 12,00014,000 crore. A sub­stan­tial chunk of the pro­ceeds, af­ter pay­ing tax and other charges, would be rein­vested in DLF to help re­duce the de­vel­oper’s debt, it had said. DLF’s net debt to­talled .₹ 24,397 crore at the end of De­cem­ber 2016.

Fi­nal bids to be pre­sented to panel of in­de­pen­dent di­rec­tors for eval­u­a­tion and mak­ing fi­nal de­ci­sion

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