DLF buys out Hilton's 26% stake in hospitality JV
The acquisition of the stake will make the joint venture a wholly-owned subsidiary of DLF.
In a filing to the Bombay Stock Exchange, DLF said its subsidiary DLF Hotel Holdings Ltd (DHHL), which holds 74 percent stake in DLF Hotels & Hospitality, acquired the remaining stake from Aro Participation and Splendid Property Company that is affiliated to Hilton International Co.
"Consequently, 'DLF Hotels' has become a wholly-owned subsidiary of 'DHHL'," it added.
When contacted, a company spokesperson told media: "This transaction has been done to take complete ownership of the company and its underlying assets, including unbuilt hotel sites, with a view to monetise the them in the near future."
The acquisition of the additional stake has been done as part of DLF's ongoing non-core divestment strategy, he added.
He, however, declined to share the valuation of the stake that the company has bought from the foreign partner.
Sources said the company has acquired the 26 percent stake for Rs 120 crore.
Earlier, DLF Hotels & Hospitality had planned to build and develop 75 hotels in India.
In 2008, DLF and Hilton had signed management agreements for 7 new hotels, taking the total number of new hotels under the alliance to 16 comprising 3,500 rooms across the country.
However, in the recent years, the JV has started selling its land parcels. It is understood that currently the JV has only 4 undeveloped land sites in Kolkata, Chennai, Mysore and Thiruvananthapuram.
In the recent years, DLF has been selling its non-core assets such as hotels and plots to cut its huge debt that stood at Rs 22,519 crore as on September 30.
So far, the company has raised Rs 3,480 crore from sale of non-core assets. Earlier this year, DLF had announced plans to raise Rs 7,000 crore in the next 2-3 years.
The company is now expecting to pare its debt burden to about Rs 10,000 crore by 2013.
Besides, the company is also selling its hospitality venture Amanresorts that would include 29 properties of the hospitality chain that DLF had acquired in 2007 for USD 400 million. DLF is expecting Rs 2,000 crore-Rs 2,500 crore from the deal. It will retain the Delhi property of Amanresorts.
The shares of DLF Monday closed 0.49 percent down at Rs 222.30 apiece on the Bombay Stock Exchange.