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