Brookefield, Blackstone and GIC run for 40% stake in DLF’s rental arm

Real Estate Company DLF   is on its final stages to sell off its Rs 10,000 crore rental business – DLF Cyber City Developers, sources have told media. Brookefield, Blackstone and GIC are the front runners for the deal and could also make a joint bid for the 40 percent stake in the rental business.

Sources say that all bidders are in final stages of due diligence. Cyber City Developers has leased commercial assets in NCR and Kolkata. The promoters of DLF will sell their 40 percent stake in the rental business post which ownership will be transferred to a third party. The funds will be used by DLF to reduce its Rs 22,500 crore debt of which Cyber City’s consolidated debt is Rs 12,325 crore.

Promoters will re-invest a significant part of the amount realised from the sale in DLF. The move will also raise promoters’ stake to 80 percent from the current 75 percent in DLF. The company, when contacted, said it did not want to respond to market speculation and will inform the exchanges if anything substantial happens. DLF is also likely to raise Rs 2,500-3,000 crore funds via qualified institutional placement (QIP) to reduce its debt further.

Speaking to CNBC-TV18 Sanjiv Bhasin of IIFL said that DLF has been in the process of changing its balance sheet and reducing debt, whch are positives. “When the implementaon takes place and when you see the return on equity taking place, that will be a positive.” Bhasin expects debt of DLF to come down to Rs 10,000 crore from Rs 10,000 crore from Rs 22,500 crore.

Credits India Infoline

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