Realty giant DLF plans to raise Rs 2,700 crore this fiscal through sale of non-core assets to reduce its debt of over Rs 16,421 crore by about one-third.
The country's largest realty firm plans to cut its debt by Rs 5,000 crore, of which it plans to raise Rs 2,700 crore from sale of non-core assets and the rest from internal accruals.
DLF had decided to raise Rs 5,500 crore last fiscal through sale of non-core assets but was able to raise only Rs 1,800 crore. It has decided to retain its wind energy business valued at Rs 1,000 crore because of tax benefits.
"We are not only confident of managing our liabilities during the current fiscal, but we will also reduce our debt very comfortably... The debt will come down by about Rs 5,000 crore from the current level," DLF Executive Director (Finance) Saurabh Chawla had told analysts yesterday in a conference call.
Half of the planned repayment will come from non-core asset sales, while the rest will be funded through revenues from operations, he added.
DLF has to repay Rs 2,500-2,700 crore in debt this fiscal and an additional Rs 1,800 crore as interest.
"Divestment of non-core assets as a strategy is to focus more on the core business operations and not merely as a means to reduce debt. However, all-cash flows from this process will be utilised to bring down debt," the presentation made to analysts said.
DLF repaid about Rs 5,600 crore of debt in the last fiscal against a mandatory debt repayment of Rs 3,549 crore.
Chawala said the current debt equity ratio stands at 0.53:1, which will increase to about 0.75:1 in this quarter, but come down during the fiscal.
DLF had last week reported that its net profit declined by 61 per cent for 2009-10 at Rs 1,730 crore against Rs 4,469 crore.
The total revenue during fiscal 2009-10 fell by 25 per cent to Rs 7,855 crore from Rs 10,431 crore in fiscal 2008-09.
In the last fiscal, the company had sold 12.55 million sq ft area across different locations.