DLF eyes Rs2,000 crore through land sale, refunds

DLF, the country’s largest property developer, expects to garner Rs2,000 crore over the next 12-18 months by selling land parcels and refunds from state governments on lands it wanted to return.

DLF needs to pay Rs1,666 crore in debt repayments by March 2011. It has repaid Rs1,224 crore so far in the current financial year.

The land parcels include those in New Gurgaon and hotel properties in West India, among others. The company is in negotiation with the Delhi Development Authority (DDA) for refund of money paid for the Dwarka Convention Centre and with the Tamil Nadu government for the Tidel Park, said a top company executive.

DLF has garnered Rs413 core in the September quarter and a total of Rs707 crore in the first half of 2010-11 by selling stake in its retail brand business and surplus land in some cities, it said in a presentation today.

In 2009, DLF had announced its plans to raise Rs5,500 crore through the sale of non-core, to reduce debt on the books. The company said it had reached the half-way mark in its divestment target in the last 18 months.

The company has a net debt of Rs19,913 crore as on September 30. It has an average cost of debt at 10.5 per cent and net debt equity ratio of 0.73. DLF said it would continue to target a net debt equity ratio of 0.5 in the coming quarters.

DLF said the company will continue to use all free cash flows to reduce debt on an accelerated basis and keep improving tenure and quality of debt. The slew of launches in the second half of 2011 and increased percentage of construction will further add momentum to the cashflow.

It said the projected net cashflows from operations and recoveries is expected to be between Rs750 to Rs1,000 crore per quarter.

The company said it was on target to meet the planned sales of 12 million sq ft in 2011. DLF is planning to launch plotted development of four to five million sq ft in Gurgaon and Chandigarh and two premium launches in South and Mumbai projects.

On Wednesday, DLF said its September quarter net profit was down 4.8 per cent due to a sharp rise in the cost of land, plots and development rights. The stock ended the day at Rs346.45, nearly 4.41 per cent down from Wednesday’s close.