Realty major DlF has cut its net debt substantially to Rs 5,513 crore with the help of fund infusion by promoters and now targets to become a zero-debt company by the end of next fiscal, a senior company official said on Wednesday.
DlF, the country’s largest real estate developer, has repaid loans of Rs 7,100 crore using fund infused by the promoters in late December.
According to an investor presentation, DlF’s net debt stood at Rs 5,513 crore and this is primarily from development business of housing projects.
The debt from commercial real estate business has now been reflected in DlF Cyber City Developers ltd (DCCDl), which is now a joint venture firm of DlF and Singapore’s sovereign wealth fund GIC.
The net debt of DCCDl stands at Rs 16,074 crore. The JV holds the bulk of rent-yielding commercial assets of DlF group.
DlF’s total debt stood at Rs 26,800 crore at June-end of this financial year. In a conference call with analysts, DlF’s group CFO Saurabh Chawla expressed confidence that company will be debt free by March 2019 with the help of proceeds from proposed qualified institutional placement (QIP), further infusion of funds by promoters and internal accruals.
“We do not see any issue in achieving this,” Chawla said, while responding to a query on planned debt reduction.
In August last year, the promoters had sold entire 40 per cent stake in DCCDl for Rs 11,900 crore. This deal included sale of 33.34 per cent stake in DCCDl to GIC for Rs 8,900 crore and buy-back of remaining shares worth Rs 3,000 crore by DCCDl.
This deal got concluded in late December. As a result, DlF’s stake in DDCDl increased to 66.66 per cent stake from 60 per cent, while GIC has the balance 33.34 per cent stake in the joint venture firm.
Post this transaction, DlF promoters K P Singh and family have infused Rs 9,000 crore in the company and would pump in Rs 2,250 crore more over the next 18 months. DlF has made preferential allotment of compulsorily convertible debentures (CCDs) and warrants to the promoters against infusion of funds.