DLF promoters may sell 40pc stake in rental arm by July

New Delhi :Realty major DLF’s promoters are likely to complete the proposed sale of 40 per cent stake in rental arm DCCDL by July as more than 25 institutional investors have shown interest to take part in bidding process.

With the proposed stake sale likely to get completed in next fiscal, DLF promoters has also deferred the conversion of their compulsorily convertible preference shares (CCPS) in DLF Cyber City Developers Ltd (DCCDL) to March 18, 2017, on the same coupon rate of 0.01 per cent per annum.

DLF in October last announced that its promoters will sell their 40 per cent stake in the DLF Cyber City Developers Ltd (DCCDL). DLF owns remaining 60 per cent stake in DCCDL, which holds the bulk of office and retail complexes.

Promoters will re-invest a significant part of the amount realised from the sale into DLF, India’s largest realty firm.
Market sources had earlier said that the deal size could be about Rs 12,000 crore.

“More than 25 global institutional investors have evinced interest in this proposed transaction. We expect to sign term sheet by end of March or mid-April,” DLF’s Senior Executive Director Finance Saurav Chawla told analysts.

Stating that this transaction would go to fair trade regulator CCI, he said: “Hopefully by end of June or July, we will get the approval”. Chawla declined to give any guidance on the valuation of the proposed deal.

DLF’s Chief Financial Officer (CFO) Ashok Tyagi said the DCCDL’s debt would be around Rs 12,000 crore by end of March.
The annual rental income of DCCDL is about Rs 2,250 crore, while total expected rental income of the entire group is Rs 2,700 crore in this fiscal, he added.

In a regulatory filing, DLF informed that promoters today deferred the conversion of their CCPS in DCCDL to March 18, 2017, on same terms and conditions.

In late 2009, DLF had announced merger of its subsidiary DCCDL with promoters’ firm Caraf Builders and Constructions.

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