DLF, India’s largest realtor according to market capitalisation, has missed its target yet again to reduce its debt. The company’s net debt increased by another Rs 100 crore to Rs 21,524 crore in the first quarter of FY12, from Rs 21,424 crore as on March 31.
In the last quarter, the company had bought a land parcel worth Rs 150 crore, while it could raise only Rs 165 crore through assets monetisation. It raised debt of Rs 667 crore for the quarter and paid off Rs 781 crore. The company’s present gross debt stands at Rs 23,860 crore. The cost of borrowing has also increased to 11.75 per cent, up 50 basis points.
DLF's total net debt increased by Rs 5,700 crore in FY11 due to the increase in working capital pressure, land acquisition outgo of Rs 1,100 crore and redemption of preference shares with a face value of Rs 4,100 crore, with a premium of Rs 1,200 crore.
The company paid off Rs 2,600 crore as interest payments and is expected to pay even more as rate rise continue.
DLF said its core activity at present is to monetise through non-core asset sales and the money raised by the same would be used for debt repayment. “Operational cash flows will not be used for debt repayments.”
DLF is hopeful of closing two asset sale transactions by the end of the second quarter, including sale of the IT SEZs in Noida and Pune.
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“Blackstone is in the initial stages of looking at the assets, and the deal is little far off at present,” sources said.
The company’s land assets of 367 million sq ft in the last quarter is down to 363 million sq ft at the end of the June quarter. Other assets on the block include the 27 acre land parcel in Gurgaon and hotel assets other than the Aman Lodhi in Delhi. DLF plans to raise Rs 6,000-7,000 crore in the next 2-3 years. It is also looking at selling non-core assets or land parcels that would not be in use in next 2-3 years.
“The debt levels are flattish at present as there has not been much movement on the same. We have built adequate pipeline for funds, in the form of joint venture partners or investment partners,”, aid Saurabh Chawla, executive director, DLF.