DLF board to meet to prepare roadmap for rental business

NEW DELHI: Realty major DLF on Saturday said its board will meet on October 8 to discuss the recommendations made by a committee on ways to drive the growth of company’s rental business worth Rs 2,400 crore.

“A meeting of the board of directors has been scheduled on October 8 to consider and deliberate on the recommendations, if any, of the audit committee which is scheduled to meet on October 8,” the company informed in a filing to the BSE.

In August last year, DLF had asked its independent directors to review the rental business and suggest ways to drive long-term growth.

DLF expects to earn a rental income of about Rs 2,400 crore during this fiscal by leasing its commercial properties including office and shopping malls comprising 30 million sq ft of area.

The audit committee was asked to “evaluate, review and recommend various strategic and financial options to drive sustainable and long-term growth and development of rental business and resolve conflict of interest in the ownership of DLF Cyber City Developers Ltd (DCCDL) with inter-se affiliated persons/entities”, DLF said in the filing.

The committee, in its meeting on October 8, would review and consider the various strategic options in this regard.

DLF had recently said the committee is “expected to complete their strategic review of the RentCo business and recommend the best path to the Board, not only to resolve the Promoter CCPS (Compulsorily Convertible Preference Shares) issue but also create a ‘RentCo’ platform in partnership with large, long term investors”.

DLF plans to monetise its rental assets to raise funds for reducing debt of about Rs 21,600 crore.

In late 2009, DLF had announced merger of its subsidiary DCCDL with promoters’ firm Caraf Builders & Constructions, the holding company of DLF Assets.

DCCDL had then issued CCPS worth Rs 1,597 crore to promoters. Post conversion of CCPS into ordinary shares, promoters would have 40 per cent stake in DCCDL, which holds bulk of the DLF’s commercial assets.

DLF’s promoters in March this year decided to defer till March next year conversion of securities held in the realty major’s subsidiary into equity shares and also slashed the coupon rate from 9 per cent to 0.01 per cent.

The deadline to convert these CCPS into shares was March 19 this year.

DLF has a land bank of nearly 300 million sq ft, of which about 50 million sq ft is under construction.