DLF sells Aman Resorts to its founder Adrian Zecha for Rs 1,600 cr

BS Reporter / New Delhi Dec 20, 2012, 00:31 IST

The transaction proceeds to help real estate company lower its Rs 21,000-cr debt

In line with its strategy to exit non-core assets and reduce debt, DLF, India’s largest realty company, has announced the sale of Aman Resorts to Adrian Zecha, the luxury hotel chain’s founder and chairman, for $300 million (about Rs 1,600 crore).

The transaction, which will see DLF Global Hospitality selling its full stake in Silverlink, the controlling entity of Aman Resorts, to Indonesian hotelier Zecha, is expected to be closed by mid-February. The present deal, besides its sale of Mumbai’s NTC Mill and the wind energy business, brings DLF closer to meeting its target of reducing the Rs 21,000-crore debt on its books to Rs 18,000 crore by March-end.

The company would, however, retain the six-acre Aman property on Delhi’s Lodhi Road. The book value of this property is about $85 million, but its market value, given its location, is estimated to be much higher.

DILUTION DRIVE Some of DLF’s recent sales

December 2011 Offloaded its stake in Galaxy Mercantile to its joint venture partner IDFC for Rs 450 crore September 2011 Sold 28 acres in Gurgaon to M3M for Rs 440 crore  December 2011 DLF and its JV partner Hubtown sold an IT SEZ in Pune to private equity firm Blackstone for Rs 810 crore  June 2012 Sold the entire stake in Adone Hotels and Hospitality Ltd (‘Adone’) for Rs 567 crore to Kolkata-based Avani Projects and Square Four Housing & Infrastructure August 2012 Sold NTC Mill land in Mumbai to Lodhas forRs 2,727 crore December 2012 Sold Aman Resorts to its founder and chairman, Adrian Zecha, for $300 million, or Rs 1,600 crore Source: Company

“The company’s focus will be on core business and a few significant launches coming up in the next four-five months,” said Sriram Khattar, senior executive director, DLF. The realty major has not had a big launch so far this financial year.

Khattar said 90-95 per cent of the deal amount would be used to reduce debt. The firm’s net debt, at Rs 23,220 crore as on September 30, had come down to Rs 21,220 crore after realisation of Rs 2,727 crore from NTC Mill land sale to the Lodha group.

Besides, the sale of its wind energy business — the 228.7-Mw installed capacity and wind energy farms in Gujarat, Rajasthan, Tamil Nadu and Karnataka — is expected to fetch DLF Rs 800-1,000 crore. “We aim to close the wind energy deal this financial year itself,” said Khattar.
The Aman Resorts properties had been put on the block two years ago, but the deal could not go through because of an economic slowdown in the Euro zone and the US. The hotel chain has 25 properties in 12 countries.

In 2007, DLF had bought Aman Resorts, founded by Zecha in 1988, at an enterprise value of $250 million — $150 million of debt — and rebuilt the Delhi property, now known as Aman Lodhi. Of the realty major’s $300-325-million investment in the chain so far, $20 million were invested in this property.

DLF divests stake in IDFC JV, gets Rs 200cr as 1st tranche

Source  :  Moneycontrol.: Dec 04, 2011 at 15:02 

DLF , India’s largest real estate company, announced that Galaxy Mercantile (GML), a joint venture company of DLF Home Developers Limited (DHDL), a wholly owned subsidiary of DLF Ltd., has received Rs. 200 crore as the first tranche of infusion of capital fromIDFC .

The amount is received as part of a process for IDFC to acquire 100% stake in the joint venture company which has been received by the joint venture partners including DHDL. The balance which would be received from IDFC has been linked to the leasing milestones.

Prior to this infusion of Rs 200 crore, DHDL had a 71% equity stake in Galaxy Mercantile Ltd., which owns of the 1.3 million square feet (msf) IT Park located in NOIDA, Uttar Pradesh.

DLF spokesperson said, "This stake sale is in line with our objective of divesting the non-strategic assets."

Spokesperson of IDFC Limited said, "We are pleased to partner with DLF, country’s largest and most experienced developer. This investment in GML is the first ever by by IDFC as a part its strategy to invest in a portfolio of yield generating office infrastructure assets in major markets around the country."

Not done anything wrong knowingly: DLF's KP Singh

Source : CNBC-TV18: Dec 02, 2011 at 15:08:

DLF has not done anything wrong knowingly, says chairman Kushal Pal Singh. However, he admitted that inadvertently mistakes can happen.

Last month, the Competition Appellate Tribunal (Compat) stayed the Rs 630 crore penalty imposed by fair trade watchdog Competition Commission of India (CCI) on DLF, India’s biggest real estate firm by market value, over alleged abuse of dominant market position.

Speaking to exclusively to CNBC-TV18's Sheeren Bhan, Singh said that he is confident of DLF’s case at the Compat. “My son Rajiv drives the company. I know his philosophy. He is a very hard taskmaster. He is very clearheaded. He makes no moans about it and he deals in a manner according to rules and regulations. But sometimes people misunderstand,” he said.

Shifting focus to reforms, Singh said. FDI in multi-brand retail is a very progressive step. But on the Land Acquisition bill, he said, the 80% consent nod is not a practical one.

"I think townships must not be kept of public purpose definition."

DLF eyes Rs 7000cr from sale of assets

Source :The telegraph:Thursday , May 26 , 2011 Real estate firm DLF plans to raise Rs 7,000 crore in the next two to three years from the sale of non-core assets to reduce its net debt of Rs 21,424 crore. In a presentation, DLF said it had raised the divestment target for non-core assets, including land parcels, to Rs 10,000 crore from Rs 4,500 crore earlier. The company has raised Rs 3,070 crore so far from the divestment of non-core assets such as hotel plots. Of the Rs 3,070 crore, Rs 1,270 crore was garnered last fiscal. “Non-core asset divestments will gain momentum with Rs 6,000-7,000 crore worth of divestments expected in the next 2-3 years,” the company said, adding that it has raised this target as it expects higher realisations from the sale of some businesses in the current financial year. DLF said it aimed to become a net debt-free entity in the next three to four years through internal accruals and the sale of non-core assets. However, the net debt of the company increased Rs 552 crore during the fourth quarter of 2010-11 and stood at Rs 21,424 crore because of strategic investments in land aggregation and a capital expenditure of Rs 1,800 crore last fiscal. Besides the sale of non-core assets, the company expects to generate “faster cash flows” from operations. Demand for new homes and offices in India declined in 2008 and early 2009 because of the global credit crunch. The financial performances of property developers, including DLF, also suffered. The slowdown forced major real estate companies to either completely or partly sell non-core assets to infuse cash into their core businesses. DLF has been trying to sell a number of its business units, such as hotels and resorts. It has sold its stake in an insurance venture with US-based Prudential Financial.

DLF plans more luxury malls, eyes Hyderabad, Chennai

Source : PTI :Monday, February 21, 2011, 16:11


New Delhi: Real estate developer DLF Ltd that currently operates luxury mall - DLF Emporio - in the Capital is considering to start similar projects in other big cities, including Hyderabad and Chennai, that are seeing traction for high-end brands.
   
"We are looking to open more luxury malls in cities like Hyderabad and Chennai," DLF Malls Business Head Savitri Devi Singh said.
   
The company is currently in talks with the existing tenants at its DLF Emporio for the same. "There are some 10-12 anchor brands we are in discussions with to bring up similar models in other cities," she said.
   
According to Singh, who did not disclose the investment planned by the company in future projects, developing malls for housing luxury brands is an attractive proposition.
   
"DLF Emporio has already broken even and is doing very well in terms of revenue generation. It is a very viable business," Singh said, although she declined to divulge the amount, developer invested on the mall.
   
According to her, the mall is currently operating at a conversion rate of about 70 per cent. Some of the brands in DLF Emporio include Giorgio Armani, Salvatore Ferragamo, Louis Vuitton, Cartier, Fendi, Dior, Just Cavali, Aigner, Tods, Tiffany’s, Burberry and Hugo Boss, along with some leading Indian designers.
   
"Even Chandigarh has good potential for selling luxury goods, but we are not sure whether it would be right to open another mall there due to its proximity to Delhi," she added.
   
Cities like Bangalore and Mumbai already have luxury malls such as the UB City and Galleria, respectively and entering there is a much lesser attractive option.
   
If experts are to be believed, there is a dearth appropriate retail space in India that is keeping many luxury brands away from the country.
   
"There is a serious need to have more retail spaces for luxury brands to expand or enter India," AT Kearney Principal Neelesh Hundekari.
   
According to a CII-A T Kearney report, India's luxury market, which is small compared to global standards, is likely to grow three times and touch USD 14.7 billion by 2015.
  
In 2009, the luxury industry, including products, services and assets, was estimated at USD 4.76 billion.

DLF plans to sell non-core assets to reduce debt

Source : :17 May 2010, 0057 hrs IST,PTI


NEW DELHI: Realty giant DLF plans to raise Rs 2,700 crore this fiscal year through sale of non-core assets to reduce its debt of over Rs 16,421 crore by about one-third.

The country’s largest realty firm plans to cut its debt by Rs 5,000 crore, of which it plans to raise Rs 2,700 crore from sale of non-core assets and the rest from internal accruals. DLF had decided to raise Rs 5,500 crore last fiscal via sale of non-core assets, but was able to raise only Rs 1,800 crore.

“We are not only confident of managing our liabilities during the fiscal. We will also reduce our debt very comfortably,” DLF executive director (finance) Saurabh Chawla said.

... The debt will come down by about Rs 5,000 crore from the current level,” DLF executive director (finance) Saurabh Chawla said. Half of the planned repayment will come from non-core asset sales, while the rest will be funded through revenues from operations, he added.

DLF has to repay Rs 2,500-2,700 crore in debt this fiscal and an additional Rs 1,800 crore as interest. “Divestment of non-core assets as a strategy is to focus more on the core business operations and not merely as a means to reduce debt.

However, all-cash flows from this process will be utilised to bring down debt,” the presentation made to analysts said. DLF repaid about Rs 5,600 crore of debt in the last fiscal against a mandatory debt repayment of Rs 3,549 crore.

Mr Chawala said the current debt equity ratio stands at 0.53:1, which will increase to about 0.75:1 in this quarter, but come down during the fiscal. DLF’s net profit declined by 61% to Rs 1,730 crore in 2009-10 against Rs 4,469 crore.

The total revenue during fiscal 2009-10 fell by 25% to Rs 7,855 crore from Rs 10,431 crore in fiscal 2008-09.
In the last fiscal, the company had sold 12.55 million sq ft area across different locations. 

 Source : :http://bankfinanceindia.blogspot.com/

 

DLF looks to exit IT SEZ in Chennai, seeks 700 crore refund from govt

Source :12 May 2010, 0121 hrs IST,ET BUREAU


CHENNAI: Concerned over the delay in getting clearance from the Centre for its IT SEZ in Chennai, India’s largest listed developer DLF has decided to pull out of the project, communicating the same to Tamil Nadu government.

Tamil Nadu’s deputy chief minister MK Stalin informed the state assembly on Tuesday that DLF is keen to exit the proposed IT-SEZ project, which was to come on 26.24 acres at Taramani in Chennai. It has offered to return the land and also asked the state government to return the Rs 700 crore that it had paid earlier for the site. The government is yet to take a call on DLF’s request.

"At Taramani in Chennai, an IT related SEZ was proposed on an extent of 26.64 acres and DLF was selected through the transparent open tender procedure. Though this firm had already remitted Rs 700 crore to the Government towards the cost of the land, they have been requesting return of this money as approval by the Central Government for the SEZ is getting delayed," Mr Stalin told the house.

It is learnt by ET apart from problems on securing clearance front from the Centre, there also seem to be differences between DLF and government agency, Tidco (Tamil Nadu Industrial Development Corporation) over the terms and conditions of the agreement for the SEZ.

"As per the agreement, at least 2.5 million square feet of IT/ITes space needs to be developed in the SEZ . But DLF is not keen to develop this in an SEZ because existing units cannot be shifted to a new SEZ," Tidco chairman and managing director Sunil Paliwal said.

DLF, on the other hand did not wish to comment on the subject. When contacted, DLF Southern Homes MD KK Raman said, "We have no comments. We have several options." But he didn’t elaborate on what these options are. Official sources said neither any decision has been yet on re-tendering the project nor about returning the amount paid by DLF. "Negotiations are still on," a senior official said.

DLF’s project may have hit a wall but the SEZ project on 25.27 acres by another national player, Tata Realty and Infrastructure at Taramani was on track and is scheduled to be completed in a couple of years.
Stalin said "This project (Tata Realty) involves building a state-of-the-art SEZ for IT with an integrated international convention centre with about 40 lakh Sq. ft. of I.T. and I.T.E.S./commercial space, an Integrated International Convention Centre to seat 1,500 delegates and 275 Service Apartments and suites at an estimated cost of 2,410 crore of rupees. Construction works are in progress now,".

He was replying to an adjournment motion moved by the opposition alleging irregularities in the MoU signed by the Government with Tata for the IT-SEZ project. He told the house Tata was not chosen arbitrarily without following any procedure. It was chosen by Tidco through the transparent tender procedure. It was during the previous AIADMK regime, 123 acres of lands were given to the firms of its choice arbitrarily without any tender.

That way, through Government orders, 80 acres of land was given to Wipro, 50 acres to Satyam Computers, 50 acres to HCL, 20 acres to Cognizant, 25 acres to Mega Soft, 25 acres to Bench mark Soft, 50 acres to Advance software. Again, without floating any tender, AIADMK Government had signed an MoU with Lee Kim Tah Holdings, Singapore to develop a township at Siruseri IT park for allotting 104 acres of land at a price of Rs 15 lakhs per acre.

DLF begins to sell land parcels

DLF Ltd, India’s largest realtor by market capitalisation, has embarked
on a land-selling spree. The company recently sold 500 plots of 200-400 yards
in Indore, Madhya Pradesh, mopping up around Rs 110 crore at
an average Rs 800 per square feet.

More sales are being consummated, some in south India,
which will garner slightly larger amounts than Indore, said
sources. Rajiv Talwar, group executive director at DLF,
confirmed the development but said he cannot disclose price detals.

“The valuations were reasonable. We are also looking to sell some
hotel plots etc,” he said. After DLF’s exit from the Bidadi project in
Bangalore and Dankuni in West Bengal, its landbank fell to 425 million
square feet compared with 751 million square feet.

It added another land parcel of 350 acre through bidding at
Haryana State Industrial Infrastructure Development
Corporation, Gurgaon.

At present it has a landbank of 432 million square feet.
In the September quarter, DLF had sold two land parcels in
Mumbai, which was bought by serial entrepreneur Sivasankaran.
Rising prices have also helped. Samir Jasuja, chief executive of
PropEquity, a real estate data and analytics provider said project
launches from April 2008 to April 2009 have seen price escalations,
especially since the absorption in metros has been good.

“The prices in some cases have even gone up by 5-15%, and
I expect the land prices to remain stable or slightly go up now
on,” Jasuja said. DLF had earlier said that it is looking to sell
land assets in 2009 to raise Rs 2,000 crore in a bid to retire debt.

The plots included hotel land, residential plots and commercial land. 
DLF has plans to monetise its assets and was able to bring in cash 
worth Rs 550 crore through asset sale in the last quarter which takes
the total amount to Rs 1,064 crore. The company has a net
debt of Rs 12,135 crore it expects to raise another Rs 4,436 crore
through asset sale.

The company is also looking to sell its windmill business for a 
valuation of Rs 1,100-1,200 crore for which it is unable to find
a buyer, said sources close to the development.

DLF Sees No Danger of ‘Bubble’ in Indian Home Property Prices

By Saikat Chatterjee,Bloomberg.

 DLF Ltd., India’s biggest developer, sees no danger of a housing “bubble,” a week after the central bank increased efforts to curb home prices.
“People are now secure enough to invest in residential housing” as companies have eased up on cutting workers, Rajeev Talwar, executive director at DLF, said in an interview with Bloomberg-UTV. “There is no danger of a price bubble, or prices increasing or galloping as they did in 2005, ‘06, ‘07.”
Prices in India are lagging behind gains in Asia after developers revived stalled construction projects and companies resumed hiring. India’s central bank on Oct. 27 ordered lenders to set aside funds to cover defaults on loans to property companies, joining authorities in Hong Kong, South Korea and Singapore in trying to rein in prices.
“We fear many” residential projects are running behind schedule, Anubhav Gupta, an analyst with Kim Eng Securities India Pvt. in Mumbai, who rates the stock as a “sell,” said in a note to clients today. “We estimate that the company has inventory of 200 billion rupees ($4.2 billion) available for sale countrywide.”
Homes sales in India may rise between 5 percent and 10 percent, boosting prices by about 3 percent, Talwar said, without providing a timeframe.
Prices of luxury homes in parts of New Delhi, the nation’s capital, are down 20 percent from a year earlier, according to Cushman & Wakefield Inc.
DLF, the second-worst performer on the Bombay Stock Exchange Realty index this year, has gained 25 percent, lagging behind the 62 percent growth in the benchmark Sensitive Index. It fell 3.2 percent to 353.5 rupees at 1 p.m. in Mumbai.
Demand for Offices
DLF’s profit declined for a fifth straight quarter after demand for property slumped as India’s $1.2 trillion economy expands at an estimated 6 percent in the year ending March 31, the slowest pace in seven years. The company expects demand for offices to revive after growth accelerates, Talwar said.
“We have to sustain growth between 7 to 9 percent a year before we see the commercial sector really coming up in demand,” Talwar said. Until then, “supply is going to hold on and retail will only come up much, much later after that.”
Gurgaon, India-based DLF has slowed construction of 27 million square feet of office and retail space, the company said in its annual report in July. More than 70 percent of new projects will be in the residential sector, with offices accounting for 16 percent, according to the report.
To reduce speculative purchases, India’s central bank last month ordered lenders to set aside more funds to cover defaults on loans to property companies. In Hong Kong, the city’s central bank on Oct. 23 tightened down-payment requirements for luxury homes for the first time since 1991.
DLF is selling its so-called “non-core assets” and reducing debt to improve profitability. The company aims to sell assets and recover dues valued at 50 billion rupees ($1.1 billion) this year, Talwar said.
Profit for the three months ended Sept. 30 plunged 77 percent, missing the 4.9 billion rupee median estimate of five analysts surveyed by Bloomberg.