Press Trust of India / New Delhi Jul 29, 2010, 15:40 IST
India's largest realty firm, DLF, today said it will sell a 92 per cent stake in its wholly-owned retail subsidiary, DLF Brands, to a promoter group company for Rs 92 crore as part of its strategy to exit from non-core businesses and only focus on real estate.
DLF Brands, which is engaged in the business of retailing various luxury and lifestyle brands, has paid up equity capital of Rs 8 crore. Yesterday, the DLF board had approved the further issue of equity shares by DLF Brands to a promoter group company.
Billionaire K P Singh-promoted DLF said in an analyst presentation that the promoter group company would infuse Rs 92 crore in DLF Brands to acquire a 92 per cent stake.
Post-promoter infusion, DLF's stake in DLF Brands will be reduced to 8 per cent from the current 100 per cent, the presentation said. Following shareholders' approval, DLF Brands will cease to be a subsidiary of DLF.
"The move is in line with the strategic objective of DLF to exit from non-core businesses," the company said.
In the 2009-10 fiscal, DLF Brands had posted a revenue of Rs 33 crore, with losses of about Rs 25 crore. The cumulative losses of the company total about Rs 45 crore, DLF said in the presentation.
DLF Brands has partnerships and joint ventures with various global luxury brands, including Mothercare, Boggi Milano, Sunglass Hut and Ferragamo.
During the first quarter of the current fiscal, DLF raised Rs 294 crore through the sale of non-core assets, including land and businesses other than real estate. The company plans to raise more than Rs 2,500 crore in the next 15-18 months through divestment of non-core assets.
DLF said the company is exploring possibilities for a strategic partnership on its hospitality chain, Aman Resorts, to "further strengthen the business model", while noting that the operating performance of Aman Resorts continues to improve as the global economic environment stabilises.
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