Real estate developer DLF said on Sunday it had entered into a joint venture with Singapore’s sovereign wealth fund GIC to build rental assets in India after its promoters sold 33.34 per cent stake in the rental arm to the Singapore sovereign wealth fund.
DLF also said it expected an infusion of Rs 13,000 crore into the company, a better part from promoters, by December and the amount would be utilised for reducing its debt substantially. While promoters are expected to invest about Rs 10,500 crore into the company, DLF expects to raise another Rs 3,000 crore from institutional investors through qualified institutional placement, sources said.
DLF will have to hit capital market as promoters’ shareholding will cross the minimum threshold of 75 per cent post infusion of fund by them. With infusion of Rs 13,000 crore into DLF and expected receipt of Rs 1,500 crore from some other assets, the firm’s debt, excluding that of its rental arm DLF Cyber City Developers Ltd (DCCDL), will come down sharply to Rs 6,000 crore from Rs 20,500 crore.
DLF had a net debt of nearly Rs 26,000 crore at the end of the June quarter and out of that Rs 5,500 crore pertained to DCCDL. DLF promoters — K P Singh and family — last week decided to sell 40 per cent stake in DCCDL for Rs 11,900 crore. This deal, the biggest in the country’s realty space, included sale of 33.34 per cent stake to GIC for Rs 8,900 crore and a buyback of remaining shares worth Rs 3,000 crore by DCCDL.
Post this deal, DLF will have 66.66 per cent stake in the DCCDL and GIC 33.34 per cent stake in the JV. “Gross proceeds to the promoters from the transaction would be Rs 11,900 crore. The net proceeds to the promoters are estimated to be in excess of Rs 10,000 crore post applicable taxes,” DLF said in an analyst presentation.