Realty major DLF plans to raise up to Rs 2,500 crore through issuance of non-convertible debentures for working capital requirements and reducing debt. The country’s largest realty firm has sought shareholders approval through a special resolution in its annual general meeting scheduled to be held on August 30. “In order to augment long-term resources for business needs and to reduce reliance on the banking system, the company intends to issue non-convertible debentures (NCDs)… up to Rs 2,500 crore,” DLF said in a notice to the shareholders. The proceeds of the NCDs would be utilised for business purposes including repayment of debts in order to reduce the interest cost and to reduce reliance on the banking systems, it added.
DLF had a net debt of Rs 22,202 crore at the end of the last financial year. Meanwhile, DLF’s promoters are likely to sell 40 per cent stake in a rental arm DLF Cyber City Developers Ltd (DCCDL) by September, a deal estimated to fetch around Rs 12,000 crore. DLF would continue to own the remaining 60 per cent stake in the DCCDL.
The promoters — billionaire K P Singh and family –would reinvest a significant part of the amount realised from this sale into DLF Ltd, helping the realty giant to reduce its debt substantially. Three global institutional investors — Blackstone, GIC and Abu Dhabi Investment Authority — have been shortlisted as potential buyers. Due diligence process is on and agreement is likely to be signed by September, according to sources.
DCCDL has about 25-26 million sq ft of leased commercial space with an annual rental income of about Rs 2,250 crore. The subsidiary also has 20 million sq ft of future development potential. DLF had posted a net profit of Rs 549.39 crore over a turnover of Rs 9,259.86 crore in the last fiscal. The company has a land bank of 281 million sq ft, of which 37 million sq ft is under construction.