DLF’s 40% Stake Sale in Rental Arm to GIC En­ters Fi­nal Lap

Re­al­tor to place pro­posal be­fore au­dit com­mit­tee for ap­proval soon

The Economic Times - - Economy & Companies - Kailash.Babar @times­group.com

Mum­bai: The deal be­tween the coun­try’s largest re­alty de­vel­oper DLF and Sin­ga­pore’s sov­er­eign wealth fund GIC for a 40% stake in DLF Cy­ber City De­vel­op­ers (DCCDL) has en­tered the fi­nal stages.

DLF told an­a­lysts on Sun­day that the stake sale, es­ti­mated to be val­ued at $2 bil­lion (around ₹ 13,000 crore), will be placed be­fore the au­dit com­mit­tee for ap­proval soon. Pro­mot­ers of DLF have en­tered into an exclusive agree­ment with GIC to sell their 40% stake in the rental arm DCCDL, which opera- tes a port­fo­lio of nearly 27 mil­lion sq ft com­mer­cial prop­er­ties that are com­pletely leased out.

DLF had first an­nounced its pro­mot­ers’ plan to sell their stake in DCCDL in Oc­to­ber 2015. The deal value was then es­ti­mated at ₹ 12,000-14,000 crore. A sub­stan­tial chunk of the pro­ceeds, would be rein­vested in the com­pany to help re­duce debt, it had said.

On Satur­day, the de­vel­oper re­ported a 58.4% year-on-year drop in its first-quar­ter net profit at ₹ 109 crore. To­tal in­come from op­er­a­tions rose 9% to ₹ 2,211.24 crore. Its fi­nance cost dur­ing the June quar­ter rose nearly 5% from a year ear­lier to ₹ 782.66 crore.

DLF’s con­sol­i­dated net debt sto- od at ₹ 25,898 crore at the end of June quar­ter. “Con­tin­ued capex in new of­fice com­plexes and con­struc­tion spend on res­i­den­tial spend shall re­sult in tem­po­rary spike in net debt lev­els for which fi­nanc­ing is al­ready in place,” DLF said in its in­vestor pre­sen­ta­tion.

The stake sale had ini­tially at­tracted in­ter­est from around 25 in­vestors and the list was then short­ened to six en­ti­ties.

How­ever, in Fe­bru­ary 2016, in the back­drop of weak mar­ket con­di­tions, DLF ex­tended the dead­line by de­fer­ring con­ver­sion of the com­pul­so­rily con­vert­ible pref­er­ence shares to pro­mot­ers un­til March18, 2017 with the same terms and con­di­tions.

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