DLF close to wind power arm deal

DLF close to wind power arm deal
The Financial Express, May 22, 2009, Page 1

Kakoli Chatterjee, New Delhi

DLF is in the final stages of negotiating a deal to sell off its subsidiary, DLF Wind Power, to French company Eole-Res, which specialises in wind and solar energy. Though the exact value of the transaction is not clear, sources close to the development said the figure is close to Rs 1,000 crore.

India’s largest real estate company by market cap has been in talks with many European and Indian companies for selling the unit, as part of its strategy to hive off non-core businesses to clear its debts.

“Wind Power has met with a good response from strategic partners wherein the due diligence of the assets is currently underway,” DLF had said while declaring its financial results in April.

Ernst & Young is advising DLF on the sale of the 250-mw company, which has wind turbines in Rajasthan, Gujarat, Tamil Nadu and Karnataka.

Rajeev Talwar, group executive director, DLF, said he had no comments to offer, in response to a query from FE. An e-mail sent to Eole-Res remained unanswered. The company has in March this year become a subsidiary of Res-Mediterrranee SAS, which develops and builds renewable energy plants across the Mediterranean basin and the Middle East.

The parties that had shown interest in buying DLF Wind Power include Adani Group, Essar Power, IL&FS from India, CLP Group of Hong Kong and BG Group Plc of the UK.

Like most firms in the realty sector, DLF is plagued by the twin problems of worsening bottom lines and enormous debts. Its net debt stands at Rs 13,958 crore, the company said last month.

DLF’s net profit dropped 41% to Rs 4,629 crore in 2008-09, compared with Rs 7,812 crore in the previous fiscal. The KP Singh-led company, as part of its plans to service debts, has recently raised Rs 3,860 crore through the qualified institutional placement route.