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DLF board meet on 25 August to decide on promoters’ 40% stake sale in rental arm to GIC

LiveMint logoLiveMint 23-08-2017 PTI

New Delhi: Realty major DLF will hold a board meet on 25 August to decide on promoters’ proposal to sell their 40% stake in its rental arm to investment firm GIC in a deal estimated at around Rs13,000 crore.

In October 2015, DLF had announced that its promoters — K.P. Singh and family — would sell their entire stake in the DLF Cyber City Developers Ltd (DCCDL), which holds the bulk of commercial assets of the group.

The promoters, who hold Compulsorily Convertible Preference Shares (CCPS) in DCCDL, had in March this year entered into an exclusivity pact with Singapore’s sovereign wealth fund GIC to negotiate on this transaction.

In a regulatory filing, DLF informed that a meeting of the audit committee will be held on 25 August to “consider and review the status of the proposed sale of CCPS held by CCPS holders to a GIC affiliate including the key terms and conditions and make appropriate recommendations to the board”.

“The board will in its meeting scheduled to be held later on 25 August 2017, consider the said recommendations and take appropriate decisions, as required,” it added.

Last week, sources had said that both the parties could sign definitive agreement by end of this month.

People familiar with the matter had earlier said the deal is likely to be valued at around Rs12,000-13,000 crore.

The promoters would infuse a large portion of proceeds from this proposed deal into DLF, which in turn would use this amount to cut its net debt that has reached nearly Rs26,000 crore.

In a latest analyst presentation, DLF said that “the company and investor are in the final stages of discussion on the documentation. The transaction shall be put up to Audit Committee/Board for final approval”.

Last week, in a conference call with analysts, DLF’s senior executive director (finance) Saurabh Chawla had said the proposed transactions is at the “fag end of the process” and hoped that the deal would be concluded in the near future.

Chawla said after the agreement between the two parties, GIC would approach the Competition Commission of India (CCI) for approval, while DLF will have to seek shareholders nod. He expected the CCI approval by early November.

DLF is expected to achieve a rental income of over Rs3,000 crore in the current fiscal, of which about Rs2,600 crore pertains to the DCCDL.

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