DLF ropes in Goldman for Aman Resorts stake sale
Wednesday, 7 April 2010
NEW DELHI, Apr 6 (Economic Times): DLF, India's largest real estate company, has appointed Goldman Sachs as an adviser as it attempts to fund buyers for Aman Resorts, a luxury hotel chain it had acquired in November 2007 for $400 million.
The company, which was hard hit by the downturn in the real estate market which started in the middle of 2008 and persisted well into 2009, has said it will exit non-core businesses and bring down its overall debt to zero over a 3-year period. DLF's debt was as much as Rs 160 billion at the end of 2009.
"DLF has decided to exit from the non-core businesses and focus on real estate development, including residential, commercial and retail. Since hotels are not a core business for DLF, it is looking at various options for Aman Resorts. However, the extent of divestment will depend upon the valuation that the potential suitors will bring on the table," said a senior executive of the company, on condition of anonymity.
Currently, DLF owns 97 per cent in Aman Resorts and its founder Adrian Zecha the rest. The company is looking at an enterprise value of $600 million or Rs 27 billion, said the official. It is open to selling the entire stake if the valuation is sufficiently attractive, said another senior official of the company involved in the process. Enterprise value is the sum of the equity value or the cost of buying the shares of a company, and the debt which the new owner has to service.
The company, which was hard hit by the downturn in the real estate market which started in the middle of 2008 and persisted well into 2009, has said it will exit non-core businesses and bring down its overall debt to zero over a 3-year period. DLF's debt was as much as Rs 160 billion at the end of 2009.
"DLF has decided to exit from the non-core businesses and focus on real estate development, including residential, commercial and retail. Since hotels are not a core business for DLF, it is looking at various options for Aman Resorts. However, the extent of divestment will depend upon the valuation that the potential suitors will bring on the table," said a senior executive of the company, on condition of anonymity.
Currently, DLF owns 97 per cent in Aman Resorts and its founder Adrian Zecha the rest. The company is looking at an enterprise value of $600 million or Rs 27 billion, said the official. It is open to selling the entire stake if the valuation is sufficiently attractive, said another senior official of the company involved in the process. Enterprise value is the sum of the equity value or the cost of buying the shares of a company, and the debt which the new owner has to service.