One of the largest real estate companies of India, DLF is selling its stake to Government of Singapore Investment Corporation (GIC). 40% of the DLF Cyber City, which is the stake of DLF will be sold to GIC, Singapore in order to repay their debts. The company has a portfolio which is made of leased commercial assets, which includes the cyber city commercial complex in Gurgaon also.
Both the parties will enter an agreement but the valuation of the same has not been revealed or disclosed by any source. The previous quarter’s balance sheet will play a major role deciding the valuation. The transaction is expected to take place in September so the valuation will depend upon the balance sheet of March or June quarter. All the money that will be raised after this transaction will be used to pay off the debts.
In 2016, JP Morgan and Morgan Stanley were delegated to manage the stake of DLF to work on the leveraging of the balance sheet. Around 15 suitors had shown an interest in the stake along with GIC who beat the others given that it already enjoys a healthy relationship with DLF.
26.8 million of commercial property is under and operated by DCCDL which makes them earn an annual rent of about 2300 crores, says the December data.
This transaction, if successful, will decrease the debt to almost nil but still it DLF will have 60% stake in DCCDL but on a consolidated basis though.
The company had a capitalization 27393 crores as it increased 2.06% and closed at 153.55 on 28th February on the Bombay Stock Exchange.