Realty major DLF’s promoters are in the final stage of discussion with potential investors to sell their 40 per cent stake in the company’s rental arm DCCDL Ltd for an estimated Rs 12,000-14,000 crore. DLF, the country’s largest real estate developer, had announced in October 2015 that its promoters would sell their entire stake in DLF Cyber City Developers Ltd (DCCDL), which holds the bulk of the commercial assets of the group. Global investors Blackstone and GIC are in the race to acquire the 40 per cent stake of DLF promoters in DCCDL, sources said. DLF holds the remaining 60 per cent in DCCDL. The promoters will infuse a significant amount in DLF to cut net debt of over Rs 24,000 crore. “We are in the final stage of discussion with prospective investors,” DLF group Chief Financial Officer (CFO) Ashok Tyagi said. DLF’s Senior Executive Director (Finance) Saurabh Chawla told analysts that the transaction is in the “last leg” and will be soon presented to the Committee of Independent Directors for evaluation and final decision.
To allay market concerns over delay in the proposed deal, Chawla said the one-year extension of deadline for conversion of compulsorily convertible preference shares (CCPS) held by promoters in DCCDL does not mean that “the transaction has been delayed by one year”.
Shares of DLF Ltd today fell 6.98 per cent to close at Rs 137.20 apiece at the BSE after the company reported a 46 per cent decline in net profit amid concerns over delay in the proposed deal.
Chawla, however, agreed that the progress on the transaction has been a tad slow, given the deal size and many complexities involved in it.
“In the short period of time, we will able to guide the market about this transaction,” Chawla said, adding that the company’s endeavour would be to announce the deal this fiscal itself.
You May Also Want To Watch:
Yesterday, DLF had announced the conversion period for CCPS issued to the promoters in DCCDL has been extended by one year at their request to facilitate its sale.
In late 2009, DLF had announced the merger of its subsidiary DCCDL with promoter firm Caraf Builders & Constructions. DCCDL had then issued CCPS worth Rs 1,597 crore to promoters.
Post—conversion of CCPS into ordinary shares, promoters will have a 40 per cent stake in DCCDL.
DLF has about 30 million sq ft of commercial area with an annual rent of about Rs 2,700 crore and out of that, DCCDL holds about 22 million sq ft of commercial space.