DLF down on DAL acquisition talk
The Hindu Business Line, March 24, 2009, page 10
Analyst says this could mean DAL has no money to pay dues to realtor.
Our Bureau
New Delhi, March 23 The shares of real estate major DLF Ltd fell 2.16 per cent on Monday on reports that the company could be eying a stake in DLF Assets Ltd (DAL).
DLF shares on the BSE ended at Rs 167.40 against the previous close of Rs 171.10.
The CFO of DLF Group, Mr Ramesh Sanka, refused comment citing the silent period ahead of closing of the fourth quarter. Mr Sanka had last week termed similar reports as “rumours”.
A Mumbai-based analyst said that if these reports turned out to be true, it implies that DAL, which owes DLF over Rs 5,000 crore, does not have the liquidity to pay back the Delhi-based realtor.
Cash crunch doubt
“It means that they could not lease the property acquired from DLF. That, in turn, indicates that the sales made in the past (by DLF) are unsold and remains as an inventory which now needs to be reversed,” Mr Sailesh Kanani, Research Analyst-Infra & Realty, Angel Broking, said.
Market watchers said speculation that DLF is mulling such a move, in order to provide an exit route to DE Shaw (an investor in the company), had been doing the rounds over the last few days and some institutions had already “gone short” on the information.
For the third quarter ended December 2008, the sales by DLF to DAL – a company promoted by DLF Chairman Mr K.P. Singh – stood at Rs 655 crore; while the PBT contribution at Rs 258 crore represented 35 per cent of DLF’s gross profit.
The Delhi-headquartered developer has in the past sold a large portion of its commercial assets to DAL.
Earlier this year, the company had said that DAL will go for a private placement to raise up to Rs 2,500 crore (via convertible preference shares) by end-March; and had also stated that it may go for a listing later this year.
The Hindu Business Line, March 24, 2009, page 10
Analyst says this could mean DAL has no money to pay dues to realtor.
Our Bureau
New Delhi, March 23 The shares of real estate major DLF Ltd fell 2.16 per cent on Monday on reports that the company could be eying a stake in DLF Assets Ltd (DAL).
DLF shares on the BSE ended at Rs 167.40 against the previous close of Rs 171.10.
The CFO of DLF Group, Mr Ramesh Sanka, refused comment citing the silent period ahead of closing of the fourth quarter. Mr Sanka had last week termed similar reports as “rumours”.
A Mumbai-based analyst said that if these reports turned out to be true, it implies that DAL, which owes DLF over Rs 5,000 crore, does not have the liquidity to pay back the Delhi-based realtor.
Cash crunch doubt
“It means that they could not lease the property acquired from DLF. That, in turn, indicates that the sales made in the past (by DLF) are unsold and remains as an inventory which now needs to be reversed,” Mr Sailesh Kanani, Research Analyst-Infra & Realty, Angel Broking, said.
Market watchers said speculation that DLF is mulling such a move, in order to provide an exit route to DE Shaw (an investor in the company), had been doing the rounds over the last few days and some institutions had already “gone short” on the information.
For the third quarter ended December 2008, the sales by DLF to DAL – a company promoted by DLF Chairman Mr K.P. Singh – stood at Rs 655 crore; while the PBT contribution at Rs 258 crore represented 35 per cent of DLF’s gross profit.
The Delhi-headquartered developer has in the past sold a large portion of its commercial assets to DAL.
Earlier this year, the company had said that DAL will go for a private placement to raise up to Rs 2,500 crore (via convertible preference shares) by end-March; and had also stated that it may go for a listing later this year.
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