Realty major DLF today said its subsidiary Caraf had consolidated holding in DLF Assets Ltd (DAL) through purchase of convertible shares from private equity firm SC Asia for Rs 3,084.68 crore.
Caraf, which was recently merged into DLF, is the holding company of DAL that was set up by DLF promoters to buy commercial properties of DLF.
“Caraf Builders & Constructions (Caraf), a subsidiary of DLF, has purchased 24,52,32,000 compulsorily convertible preference shares issued by DAL and held by DSIPL (a company owned by SC Asia Pte Ltd), for a consideration of Rs 3,084.68 crore,” DLF said in a statement.
Compulsorily convertible preference shares have to be converted into ordinary shares after a pre-determined date.
“This has resulted in Caraf’s economic interest in DAL rising to 91.90 per cent,” it said. Caraf earlier had 50 per cent stake in DAL.
SC Asia (Symphony Capital), which had invested $650 million in DAL, would continue to have an economic interest of 4.59 per cent in DAL through DSIPL, the statement said, adding the transaction was consummated on April 23, 2010. The remaining 3.51 per cent stake was with private equity firm DE Shaw, a company official said. DE Shaw had invested $400 million in DAL in 2007. Before merger, Caraf had bought a substantial part of DE Shaw stake in DAL.
Economic interest means the right to have a share in the company’s income, gains, losses, deductions, credit or other agreed upon similar benefits.
“This is in line with DLF’s overall strategy to consolidate the shareholding of DAL,” the statement said.
In March, DLF had completed the integration of promoter group company Caraf with subsidiary Cyber City Developers in order to consolidated all rental businesses under one umbrella. DLF holds 60 per cent stake in Cyber City Developers, while the rest is owned by DLF promoters.
