Moneycontrol
Get App
Last Updated : May 31, 2016 02:32 PM IST | Source: CNBC-TV18

PVR deal a step towards creating pure-play real estate co: DLF

Speaking to CNBC-TV18, Saurabh Chawla, Senior ED Finance at DLF said this is a year- old transaction which DLF sees as a step forward to create a pure play real estate entity.


The long-awaited deal between DLF and PVR has been consummated and DLF has entered into definitive agreements with PVR for sale of its cinema business.


Speaking to CNBC-TV18, Saurabh Chawla, Senior ED Finance at DLF said this is a year-old transaction which DLF sees as a step forward to create a pure play real estate entity and the company got into the cinema business primarily to anchor its retail malls.


He said the sale of DT Cinema to PVR amounts to around Rs 430 crore and it will be used to reduce the company’s debt.

Close

He further gave a new booking guidance of around Rs 3500 crore in this fiscal.

Below is the transcript of Saurabh Chawla’s interview with Sonia Shenoy and Reema Tendulkar on CNBC-TV18.

Sonia: Take us through how much funds you have received or you will receive and what you plan to do with that money.

A: This is a transaction which is almost one year old so upon receiving the conditional Competition Commission of India (CCI) order, we have gone ahead and complied with those conditions and closed the transactions with PVR. Over a period of time, we see about Rs 430 crore.

This is ex seven screens in Saket and GK2. So, from our perspective, it is a transaction, a step forward to create a pure play real estate entity of ours in the retail space.

We got into the cinema business primarily to anchor our retail malls and this was almost 10-12 years back when there were not many large players with the domain expertise.

But as we go forward to create our pure play commercial business, this is a step in that particular direction.

Sonia: So, do you have any more non-core assets that you would be looking to sell off anytime soon and anything in FY17 itself that we can hope for?

A: No, we do not. We have completed our non-core asset or business sale, if I may say so. And we will now continue to work in the area of compulsarily convertible preference shares (CCPS) sale which is currently underway in the markets.

Reema: You will use the Rs 433 crore of funds which you have received for reducing your debt. Take us through the fund utilisation.

A: Basically adds on to my net cash in the books.

Sonia: Since we have you with us, can you take us through what the expectation is as far as numbers are concerned going ahead because the slowdown has hit your earnings quite a bit in this quarter? What could the pre-sales be for the next couple of quarters? How is the demand situation looking?

A: if you look at year-on-year (Y-o-Y), our sales and our performance has grown substantially.

So, yes quarter-on-quarter (Q-o-Q), it may have gone off, but if you were to remove the last quarter one off or exceptional item of the sale to GIC, there also we have seen growth over there. So, net I would say the conditions are better than what they were one year back, but it will still take some time for markets to recover.

Our industry is highly correlated to the gross domestic product (GDP) and also certain micro market conditions. So, we get constrained because of demand, supply situation especially in our core market which is Gurgaon.

But we see early signs right now. If you look at the last quarter, we have done little bit of sales in New Gurgaon.

Hopefully, next few quarters if the trendline continues, then we will be able to give a much firmer guidance as we go forward.

So, at this stage we maintain our new bookings guidance of about Rs 3,000-3,500 crore only and we will wait to see how these micro market conditions improve.



Moneycontrol Ready Reckoner
Now that payment deadlines have been relaxed due to COVID-19, the Moneycontrol Ready Reckoner will help keep your date with insurance premiums, tax-saving investments and EMIs, among others.
Get best insights into Options Trading. Join the webinar by Mr. Vishal B Malkan on May 28 only on Moneycontrol. Register Now!

First Published on May 31, 2016 11:00 am
Sections
Follow us on