In line with its strategy to exit non-core assets and reduce debt, DLF, India’s largest realty company, has announced the sale of Aman Resorts to Adrian Zecha, the luxury hotel chain’s founder and chairman, for $300 million (about Rs 1,600 crore).
The transaction, which will see DLF Global Hospitality selling its full stake in Silverlink, the controlling entity of Aman Resorts, to Indonesian hotelier Zecha, is expected to be closed by mid-February. The present deal, besides its sale of Mumbai’s NTC Mill and the wind energy business, brings DLF closer to meeting its target of reducing the Rs 21,000-crore debt on its books to Rs 18,000 crore by March-end.
The company would, however, retain the six-acre Aman property on Delhi’s Lodhi Road. The book value of this property is about $85 million, but its market value, given its location, is estimated to be much higher.
| DILUTION DRIVE Some of DLF’s recent sales |
Source: Company |
“The company’s focus will be on core business and a few significant launches coming up in the next four-five months,” said Sriram Khattar, senior executive director, DLF. The realty major has not had a big launch so far this financial year.
Khattar said 90-95 per cent of the deal amount would be used to reduce debt. The firm’s net debt, at Rs 23,220 crore as on September 30, had come down to Rs 21,220 crore after realisation of Rs 2,727 crore from NTC Mill land sale to the Lodha group.
Besides, the sale of its wind energy business — the 228.7-Mw installed capacity and wind energy farms in Gujarat, Rajasthan, Tamil Nadu and Karnataka — is expected to fetch DLF Rs 800-1,000 crore. “We aim to close the wind energy deal this financial year itself,” said Khattar.
The Aman Resorts properties had been put on the block two years ago, but the deal could not go through because of an economic slowdown in the Euro zone and the US. The hotel chain has 25 properties in 12 countries.
In 2007, DLF had bought Aman Resorts, founded by Zecha in 1988, at an enterprise value of $250 million — $150 million of debt — and rebuilt the Delhi property, now known as Aman Lodhi. Of the realty major’s $300-325-million investment in the chain so far, $20 million were invested in this property.
