You are using an older browser version. Please use a supported version for the best MSN experience.

GIC seeks CCI nod for Rs9,000 crore deal with DLF

LiveMint logoLiveMint 02-10-2017 PTI

New Delhi: Singapore’s sovereign wealth fund GIC Pvt. Ltd has approached the Competition Commission of India (CCI) to seek approval for its deal to acquire stake in DLF Ltd’s rental arm for Rs8,900 crore and form joint venture with the real estate firm.

GIC had in late August agreed to buy 33.34% stake in DLF’s rental arm DLF Cyber City Developers Ltd for Rs8,900 crore. GIC will buy shares in DLF Cyber City from DLF promoters. According to sources, GIC has approached CCI to get approval for this deal. The deal is expected to be approved by next month, they added.

On its part, DLF last week got shareholders approval for promoters’ decision to sell their entire 40% stake in the rental arm for Rs11,900 crore. This deal included sale of 33.34% stake in DLF Cyber City to GIC for Rs 8,900 crore and a buyback of the remaining shares worth Rs3,000 crore by DLF Cyber City. Post this deal, DLF will have 66.66% stake in DLF Cyber City and GIC 33.34% in the joint venture.

“Institutional investors have overwhelmingly supported this strategic transaction, which will be a game-changer for the company. This will not only remove conflict of interest and reduce significantly the company’s overall debt, but create free cash flows,” DLF’s senior executive director (finance) Saurabh Chawla told PTI. “We intend to create a pure play in our commercial and residential businesses,” he said.

While the residential business will be driven 100% by DLF, the commercial segment will be run in a JV with GIC, Chawla said. DLF promoters—K. P. Singh and family—will infuse the net proceeds into DLF for debt repayment. While promoters are expected to invest about Rs10,500 crore into the company, DLF expects to raise another Rs3,000 crore from institutional investors as the company will have to hit the capital market to maintain promoters shareholding at 75% post their infusion of funds. DLF would use this Rs13,500 crore to repay its debt that stood at nearly Rs26,000 crore at the end of the June quarter.

DLF Cyber City Developers Ltd has rent yielding assets of 26.9 million square feet with annual rental income of over Rs2,500 crore. It has an under-development pipeline of 2.5 million sq ft with further development potential of 19 million sq ft within the portfolio.

More From LiveMint

image beaconimage beaconimage beacon