India's DLF raises almost $800m in share sale
Friday, 15 May 2009
MUMBAI, May 14 (AFP): India's top real estate firm DLF Ltd, grappling with a major property slump, said Wednesday some of its founders sold a stake of almost 10 per cent in the company for nearly 800 million dollars.
The founders sold 168 million shares in the open market for 38.6 billion rupees (779 million dollars), DLF told the Mumbai stock exchange.
DLF, controlled by billionaire and principal founder Kushal Pal Singh, called the sale the "largest equity transaction in the Indian real estate sector" after DLF Ltd's own initial public offer (IPO) in 2007 which raised 2.24 billion dollars.
The sale was priced at just above 230 rupees a share, a 2.6-per cent discount to the May 12 closing price, a DLF statement said.
It did not identify the buyers of the 10-per cent stake or specify which founders sold.
The funds raised would be used to buy out private equity firm D.E. Shaw's stake in DLF's privately held properly trust, DLF Assets Private Ltd (DAL), DLF said.
The transaction "will put to rest investor concerns regarding DAL's liquidity as well as reduce the net exposure" to DAL in DLF's books, said the statement.
DAL, which purchases commercial property from its parent company, will use the funds to meet its financial obligations to DLF, which it had been struggling to meet amid a sharp slowdown in the commercial property market.
After the stake sale, DLF founders will hold a 78.6- per cent shareholding in the firm.
The company's vice chairman Rajiv Singh called it a "game-changing transaction" for the property developer.
The transaction nearly doubles DLF's free float -- shares available for trading in the market, excluding those held by the founders, government and strategic investors -- to 21.3 from 11.4 per cent.
DLF's share closed down 3.75 rupees or 1.59 per cent at 232.5 rupees.
The share sale comes after DLF reported earlier this month its net profit plunged by 93 per cent in the fourth quarter to 1.59 billion rupees (32 million dollars), hit by the dive in the property market.
The founders sold 168 million shares in the open market for 38.6 billion rupees (779 million dollars), DLF told the Mumbai stock exchange.
DLF, controlled by billionaire and principal founder Kushal Pal Singh, called the sale the "largest equity transaction in the Indian real estate sector" after DLF Ltd's own initial public offer (IPO) in 2007 which raised 2.24 billion dollars.
The sale was priced at just above 230 rupees a share, a 2.6-per cent discount to the May 12 closing price, a DLF statement said.
It did not identify the buyers of the 10-per cent stake or specify which founders sold.
The funds raised would be used to buy out private equity firm D.E. Shaw's stake in DLF's privately held properly trust, DLF Assets Private Ltd (DAL), DLF said.
The transaction "will put to rest investor concerns regarding DAL's liquidity as well as reduce the net exposure" to DAL in DLF's books, said the statement.
DAL, which purchases commercial property from its parent company, will use the funds to meet its financial obligations to DLF, which it had been struggling to meet amid a sharp slowdown in the commercial property market.
After the stake sale, DLF founders will hold a 78.6- per cent shareholding in the firm.
The company's vice chairman Rajiv Singh called it a "game-changing transaction" for the property developer.
The transaction nearly doubles DLF's free float -- shares available for trading in the market, excluding those held by the founders, government and strategic investors -- to 21.3 from 11.4 per cent.
DLF's share closed down 3.75 rupees or 1.59 per cent at 232.5 rupees.
The share sale comes after DLF reported earlier this month its net profit plunged by 93 per cent in the fourth quarter to 1.59 billion rupees (32 million dollars), hit by the dive in the property market.