Realtor in talks to divest stakes in southern projects to cut over Rs 21,000 crore debt.
Anshul Dhamija & Boby Kurian, TNN | 30 Sep, 2013, 10.55AM IST
BANGALORE: Realty giant DLFBSE -2.54 %has held talks to divest some of its southern projects worth about Rs 900 crore, or $150 million , to the developer arm of the Chennai-based Shriram Group, said people directly familiar with the matter.
Shriram Properties is in discussions to acquire land parcels and not yet launched projects of DLF, which is seeking to pare its $3.5-billion (over Rs 21,000-crore ) debt through non-core divestments.
Shriram Properties is in discussions to acquire land parcels and not yet launched projects of DLF, which is seeking to pare its $3.5-billion (over Rs 21,000-crore ) debt through non-core divestments.
DLF wants to focus on select cities and pursuer highend developments with better operating margins.
The privately held unit of the $9-billionShriram Group has had more advanced negotiations with DLF regarding the latter's two land parcels in Hyderabad but the discussions also covered not yet commenced projects in cities like Chennai.
India's biggest developer DLF is unlikely to exit projects that are already under construction. Sources mentioned earlier said DLF has to decide whether it should divest at lower valuations, or wait longer. DLF also has lockin clauses and should retain a stake in some of these projects under the land acquisition agreements with state bodies, which complicates the value-unlocking moves, added one source who did not wish to be named since the talks are private.
When contacted, both Shriram Properties and DLF declined to comment on market speculation.
Property brokers have assessed that in the years leading up to the 2008 economic meltdown, DLF had splurged at least $1 billion in land aggregation in south India. The total developable area of DLF's land holdings between Chennai, Bangalore and Hyderabad add up to around 18 million sq ft, said an international property consultant, who has reviewed the land parcels. DLF shares ended nearly 3% down at Rs 132 in Mumbai on Friday.
Shriram Properties, a zero-debt company and sitting on Rs 400 crore cash, could fund the transaction through structured financing support from investors like Indiabulls and JPMorgan. The Shriram group arm has explored tying up more than Rs 1,200 crore in structured debt to step up the development story ahead of a possible initial public offering in the near future.
Last week, TOI reported that Shriram was also in dialogue with a real estate fund of the Tatas to sell a minority stake. Private equity investors TPG, Starwood Capital and Walton Street are other existing backers of the company.
The privately held unit of the $9-billionShriram Group has had more advanced negotiations with DLF regarding the latter's two land parcels in Hyderabad but the discussions also covered not yet commenced projects in cities like Chennai.
India's biggest developer DLF is unlikely to exit projects that are already under construction. Sources mentioned earlier said DLF has to decide whether it should divest at lower valuations, or wait longer. DLF also has lockin clauses and should retain a stake in some of these projects under the land acquisition agreements with state bodies, which complicates the value-unlocking moves, added one source who did not wish to be named since the talks are private.
When contacted, both Shriram Properties and DLF declined to comment on market speculation.
Property brokers have assessed that in the years leading up to the 2008 economic meltdown, DLF had splurged at least $1 billion in land aggregation in south India. The total developable area of DLF's land holdings between Chennai, Bangalore and Hyderabad add up to around 18 million sq ft, said an international property consultant, who has reviewed the land parcels. DLF shares ended nearly 3% down at Rs 132 in Mumbai on Friday.
Shriram Properties, a zero-debt company and sitting on Rs 400 crore cash, could fund the transaction through structured financing support from investors like Indiabulls and JPMorgan. The Shriram group arm has explored tying up more than Rs 1,200 crore in structured debt to step up the development story ahead of a possible initial public offering in the near future.
Last week, TOI reported that Shriram was also in dialogue with a real estate fund of the Tatas to sell a minority stake. Private equity investors TPG, Starwood Capital and Walton Street are other existing backers of the company.
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