DLF to raise $1.5-2 bn from rental biz asset sale

Indian realty major DLF today announced that the Board will be meeting on October 8 to take a call on raising USD 1.5 billion by selling part of its rental business. The proceeds from the same will also be used to halve its debt.

The Board meeting is expecting bring clarity on the Compulsorily Convertible Preference Shares (CCPS) issue. The Board will also take a call on cutting stake in DLF rental business company by up to 50 percent and in the process raise USD 1.5-2 billion from a trusted private equity investor or sovereign fund. This is crucial because this is DLF’s game plan now to cut its debt by almost 50 percent.

Once the CCPA issue is also resolved, what could happen is the promoter's stake in DLF Limited rising and that could be another transaction that will occur in the next fiscal.

There could also be a QIP. So, clearly DLF going on a fund raising drive at a time when the property market is under pressure.