DLF cuts debt by Rs 2,000 cr; to close Amanresorts deal in Q3

DLF said it will bring down the net debt to about Rs 18,500 crore by March 2013 and to below Rs 15,000 crore in the medium term with the help from surplus cash flow.

Updated: Nov 14, 2012, 20:29 PM IST

New Delhi: Helped by prime land sale in Mumbai, realty major DLF on Wednesday said it has cut net debt by Rs 2,000 crore in this quarter to Rs 21,220 crore and will reduce it further as it is on the "verge" of selling luxury hotel chain Amanresorts and wind energy business.

DLF said it will bring down the net debt to about Rs 18,500 crore by March 2013 and to below Rs 15,000 crore in the medium term with the help from surplus cash flow, sale of non-core assets and issue of fresh equity shares next year to dilute promoters' stake in the company.

The country's largest developer said it will launch about 9-10 million square feet of area, mostly in Gurgaon, in the next five months of this fiscal, which would help the company in achieving sales booking target of Rs 6,500 crore for FY'13.

"With closure of Mumbai land transaction, We have got strength in balance sheet. After sale of Amanresort and wind energy business, there will be further strength," DLF CFO Ashok Tyagi said in a conference call with analysts.

DLF recently sold 17 acre prime land in Mumbai to Lodha Developers for Rs 2,727 crore, helping it to bring down the net debt to Rs 21,220 crore currently from Rs 23,220 crore as on September 30. Net debt rose by Rs 540 crore during July- September quarter from Rs 22,680 crore as on June 30.

"As on date, net debt position is Rs 21,220 crore... With the consummation of the balance divestments, the net debt of Rs 18,500 as on March 31 is highly achievable," DLF said in an investors presentation.

DLF Executive Director (Finance) Saurav Chawla said the company expects to announce the sale of Amanresort in this quarter and wind energy business by March 2013. The company expects to raise about Rs 2,500 crore from these two deals and another Rs 500 crore from smaller transactions.

The company is in "advance stage of negotiation and documentation on Aman Resorts transaction".

DLF has been selling its non-core assets (such as IT Parks/SEZs and hotel plots) from last two years and has raised Rs 5,773 crore by end of second quarter of FY'13.

Stating that the "worst is behind" it, Chawla said: "The company is now well positioned to 'take-off' as it moves towards new launches in excess of 9 million square feet during the second half of FY'13".

Out of the planned new projects, 8.5 million square feet of luxury and premium group housing properties will be launched in Gurgaon. Bangalore and Lucknow or Mullanpur will also see 1 million square feet of new launches each, it added.

DLF expects to achieve sales booking of Rs 2,500-3,000 crore in the next five months from Gurgaon only. It said launching of 'high impact' projects may have a positive impact on the financials of this fiscal.

On the commercial segment, Tyagi said that the rental income would grow to Rs 2,100-2,200 crore annually from Rs 1,800 crore currently, which can easily serve debt of around Rs 12,000 crore.