Aman Resorts sale talks not restricted to Adrian Zecha: DLF

Real estate major DLF has said that it is in talks with other players to sell its luxury hotel chain Aman Resorts. In an interview to CNBC-TV18, Ashok Tyagi, chief financial officer, DLF says this, however, does not mean that the deal with Adrain Zecha, who is the owner and founder of the hotel chain, has fallen through.

Tyagi says due to the continuous delays in the deal closure with Zecha,  the company finds it prudent to negotiate with other players too.

Also read: DLF to sell stake in insurance JV to pare debt

DLF's move is directed at paring its Rs 23000 crore debt by selling its non-core assets. Below is the edited transcript of Tyagi's interview to CNBC-TV18.

Q: Is that plan still on or is that deal that you were trying to cobble up with Adrian Zecha, has that fallen through?
A: Just to give you the perspective, we had four major non-operating fundraising plans, three of which are concluded. Those included selling off some Mumbai land, the wind farm sale and the Institutional Placement Programme (IPP).
Aman Resorts is the last or the residual of those four big actions that needs to be concluded. The deal with Adrian-Zecha continues to be on as we speak. They are trying to get the financial closure on their buy but the fact is that there has been a delay and now there are three-four other players who have begun discussions with us. So, right now we continue to be in dialogue and discussion in trying to hit closure with Zecha and that company but yet there are few of the other companies who have begun talking with us.

Q: But the fact that you have opened negotiations with other parties would indicate that the deal is not going ahead as you planned with Zecha. They have already missed two payments. What is the timeline now in terms of when you expect even the first payment to happen from them?
A: Just from a technicality point, there has been a small deposit that they had paid in February-March earlier, which we have. So, in that sense there is some part payment on the deal that has happened.
The reason we have started discussions with three-four other players is exactly because there has been a continuing delay in closure of the deal with the people whom we have signed the original agreement with. We are still hopeful, we still are getting the right signals from the banking circles. However, given the time that has elapsed, it is wise and prudent for us to begin talking with some other players as well who have been interested in the deal for some time and whom we had not opened our doors from a negotiation standpoint for the last few months. Q: Are these mostly private equity players that you are speaking to and just because of this time lapse point that you made, would you say that the valuation for the deal might have to be relooked at and possibly brought down?
A: Unfortunately, because of confidentiality, I will not be able to divulge the specifics of the people whom we are talking with.
We are still looking at the same valuation that we had earlier. To some degree, this is one deal where from a very myopic perspective, the weakening rupee is going to help us but right now, we are not looking at any significant value erosion from what we had anticipated earlier. Q: Are you going to achieve that target that you had set out earlier of getting to just above Rs 17,000 crore of debt by March 2014 or in the light of how difficult it is now in the market to cobble up a deal, you may have to take a relook at that?
A: It has broken into two pieces. One was closing these residual non-core transactions and the second is ensuring that operationally from including payments to capex and for the residual land buying, we have come to atleast a breakeven situation riding the launches. So, from a launch perspective, clearly, if Q1 is an indication, we are back to being in a reasonably strong position from a launch perspective.
From a non-core perspective, Aman continues to be a major transaction. We still believe that Rs 17,500 crore to Rs 18,000 crore debt number is still extremely achievable in March 2014.