NEW DELHI: DLF, the country’s largest real estate developer, is planning to raise Rs 5,500 crore through sale of “non-strategic” assets as part of its “liquidity preservation and deleveraging” exercise. The company is selling such assets that may not start contributing in 3-5 years, DLF Vice-chairman Rajiv Singh told an analyst conference call, adding that it was a “strategic” move and only such assets are being disposed off that can be “recaptured later.” The sale of assets worth Rs 3,500 crore is being executed, while the company is working on identifying the balance Rs 2,000 crore worth of assets that are to be disposed off, Mr Singh said.

He didn’t give break-up of expected revenues from different assets, but a quarterly presentation released by DLF says the company should be able to raise Rs 900 crore through sale of its wind power business. The presentation also mentions receipt of Rs 336 crore from the state governments following its exits from Bidadi (Karnataka) and Dankuni (West Bengal) projects and an expected receipt of Rs 850 crore on exit from convention centre project in Dwarka, Delhi. The company will also sell hotel projects, but Mr Singh clarified that Aman Resorts that DLF acquired less than two years ago, was not to be disposed off.

Analysts have been worried about DLF promoter’s company DLF Assets’ (DAL) ability to make payments for the purchase of properties from DLF. Mr Singh said DAL will be able to make payments in due course as it plans to raise more funds through private equity and lease rental discounting route. Under the agreement, DLF is supposed to sell 13.5 million sqft of IT SEZ to DAL. At present, only 5.1 million sqft has been handed over to DAL, while 3.5 million sqft will be handed over in two years. DLF has suspended further sale to DAL given lower demand for IT SEZ space due to a global downturn.

DAL contributed only 8% to DLF’s PBT in the fourth quarter compared to 43% contribution for the full year 2008-09. DLF on Thursday announced its fourth quarter result, where it reported its sharpest ever fall in profit of 93% on account of slump in property market and price reduction for sold out apartments in some projects.

The entire impact of price reduction – Rs 688 crore in revenue and Rs 302 crore in profit before tax – has been absorbed in the fourth quarter itself.

The company’s EBIDTA margin fell to 28% in March quarter from 65% in the year-ago quarter.

The company’s finance charges rose to 12% of the revenue in the fourth quarter from 6% in the preceding quarter. The gross debt of DLF has risen from Rs 15,525 crore at the end of December to Rs 16,358 crore now. A total debt of Rs 3,591 crore will come due for repayment in the current fiscal.

source: Economictimes

Tags: DLF, Dlf news

Similar Posts:

• HDIL to raise Rs 2,880 crore in QIP
• ABB plans Rs 4,400-cr buyback offer to raise stake to 75%
• RCom to raise Rs 5,000 cr by selling real estate
• Vascon Engineers to raise Rs 200 cr via IPO
• DLF to raise up to $510 mln from PE investment