Realty major DLF and its joint venture partner Hubtown have off loaded their entire stake in the Pune IT special economic zone (SEZ). Private equity major Blackstone has bought the 11.83-hectare DLF Ackruti Info Parks for Rs 810 crore. Originally, DLF had a 67 per cent in it, while 33 per cent was with Hubtown.
The exit comes in the wake of a September 19 nod by the board of approval (BoA) in the commerce ministry to allow proposals from SEZ developers such as DLF to dilute project equity. It is the first such nod since SEZs came into existence five years ago. Till now, there was no exit route available for SEZ developers, barring getting their projects denotified.
“The above transaction is in line with DLF’s continuing objective of divesting its non-strategic assets,” a DLF spokesperson said on Wednesday.
The 1946-founded DLF, which had debt of Rs 22,519 crore at the end of September, plans to bring it down to Rs 19,000 crore by the end of this financial year, and to Rs 10,000 crore by FY13 -- through sale of non-core assets.
SEZs are increasingly becoming unattractive for developers, investors and companies. In fact, the number of fresh proposals udner BoA’s consideration has also seen a decline. A combination of warped tax policies, issues around land acquisition and difficult funding environment have soured the story for SEZs. There are 381 notified SEZs at present.
The operational ones, from which exports take place, total 148. Exports from these SEZs topped Rs 1,76,479.69 crore as of September 2011 — up 26.20 per cent from the corresponding period of the previous year.
DLF is targeting a realisation of Rs 3,000 crore to Rs 3,500 crore from non-core asset sales, for 2011-12. Pune SEZ is one of the two big-ticket sales it was eying to meet the debt reduction target. The other one is Aman Hotel.
The Aman Resorts deal could fetch the company around Rs 2,000 crore. DLF executive director Rajeev Talwar had earlier said the Aman hotel sale was only at an “arm’s length”, though it would not conclude this calendar year. “Early next year looks more likely,” he had told Business Standard.
The stake sale in Aman will exclude the Delhi hotel (earlier named Lodhi). DLF has got the final bids from four to five companies. Investment bankers Goldman Sachs and Citibank are in the process of finalising the deal.
Going aggressive on cutting debt, the country’s largest developer by market capitalisation finalised two deals this month, where it signed an agreement to divest its entire stake in Galaxy Mercantile. Galaxy will buy the entire DLF stake in the project for Rs 450 crore over the next 12 to 18 months. DLF has already received the first tranche of Rs 200 crore from this deal. The balance payment has been linked to various leasing milestones.
In another of its moves early this month, DLF acquired an additional 26 per cent stake in its joint venture DLF Hotel Holdings Ltd, from Aro Participation Ltd and Splendid Property Company, affiliates of Hilton International, for Rs 120 crore, only to offload the entire stake at a later date.