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It also slashed the coupon rate from 9 per annum to 0.01 per cent.
The deadline to convert these Compulsorily Convertible Preference Shares (CCPS) into shares was March 19 this year, but it could not be executed in view of SEBI's order in October 2014 banning DLF and six executives from capital market for the next three years. The SEBI order was quashed yesterday by Securities Appellate Tribunal (SAT) and the three year-ban has been reduced to six months.
In late 2009, DLF had announced merger of its subsidiary DLF Cyber City Developers Ltd (DCCDL) with promoter firm Caraf Builders & Constructions, the holding company of DLF Assets. DCCDL had then issued CCPS for Rs 1,597 crore to promoters.
Post-conversion of CCPS into ordinary shares, promoters would have 40 per cent stake in DCCDL, which holds bulk of the DLF's commercial assets. DLF has about 30 million sq ft of commercial area with an annual rent of about Rs 2,000 crore.
"The CCPS Holders have conveyed in writing to the DCCDL Board and informed the Independent Directors, KN Memani and DV Kapur that they are agreeable to defer conversion of the CCPS until March 18, 2016 and also to reduce the coupon rate on the CCPS from 9 per annum to 0.01 per cent per annum for the period of the extension," DLF said in a filing to the Bombay Stock Exchange.
"100 per cent of the CCPS Holders of DCCDL and 100 per cent of the equity shareholders of DCCDL have agreed to the variation in terms of the CCPS," it added.
Promoter group firms Buland Consultants and Investments Pvt Ltd, Rajdhani Investments & Agencies Pvt Ltd and Sidhant Housing and Development Company, which hold 15,96,99,9999 (9 per cent) CCPS of DCCDL (whose 100 per cent equity/voting capital is held by DLF), had sought clarification on the way forward as the deadline was March 19, 2015 for conversion.
A notice to convene Audit Committee and the Board was issued on March 5 to consider the matter.The promoters decided to defer the conversion of CCPS following the recommendations made by the audit committee as well as DLF's board.
In August last year, DLF had said that the Audit Committee chaired by KN Memani would evaluate, review and recommend various strategic options to drive sustainable and long-term growth and development to the rental business. The audit committee suggested the DLF promoters to defer the compulsory conversion of the CCPS by a period of one year and also reduce the dividend coupon rate, the filing said.
The panel's recommendation was made to facilitate the consolidation and development of rental business of the company without causing a conflict of interest by virtue of compulsory conversion of the CCPS which would result the CCPS holders (promoters) holding 40 per cent equity shareholding in DCCDL, it added.
