DLF to offload stake in construction arm
The Financial Express, Corporates & Markets, June 12, 2009, Page 1
Kakoly Chatterjee, New Delhi
The country’s largest real estate firm, DLF, is planning to offload its stake in its construction arm, which is an equal joint venture with the UK-based construction company, Laing O'Rourke. DLF is expected to recover upwards of Rs 250 crore (the amount it had invested for the JV initially) from the stake sale.
The realty company had said while announcing its financial results that it would be exiting its non-core businesses.
In all likelihood, DLF will be selling its stake to Laing O'Rourke itself. A company spokesperson when contacted declined to comment.
In early 2006, DLF had entered into a joint venture with Laing O'Rourke. The two partners invested Rs 250 crore each towards an initial corpus of Rs 500 crore. The JV had projected a turnover of Rs 5,000 crore by 2010-11. The joint venture was hoping to tap the infrastructure sector, which includes express highways, airports and hi-tech construction involving power plants. It had also plans of bidding for modernisation of airports like Chennai and Kolkata. Another important role that the joint venture construction firm was expected to play was to take charge of all DLF's construction activities.
However, with a changed scenario during the downturn, DLF, like most real estate firms, had to take a relook and restructure its business plans. It is reeling under huge debt, currently its net debt stands at Rs 13,958 crore. As part of its plans to service debts, DLF recently raised Rs 3,860 through stake sale by the promoters.
It is also under pressure from dip in bottomlines.
For the whole of 2008-09, DLF's net profit decreased by 41% at Rs 4,629 crore compared with Rs 7,812 crore in the previous fiscal. DLF reported a 93% plunge in consolidated net profit for the fourth quarter of 2008-09 at Rs 159.05 crore.
The Financial Express, Corporates & Markets, June 12, 2009, Page 1
Kakoly Chatterjee, New Delhi
The country’s largest real estate firm, DLF, is planning to offload its stake in its construction arm, which is an equal joint venture with the UK-based construction company, Laing O'Rourke. DLF is expected to recover upwards of Rs 250 crore (the amount it had invested for the JV initially) from the stake sale.
The realty company had said while announcing its financial results that it would be exiting its non-core businesses.
In all likelihood, DLF will be selling its stake to Laing O'Rourke itself. A company spokesperson when contacted declined to comment.
In early 2006, DLF had entered into a joint venture with Laing O'Rourke. The two partners invested Rs 250 crore each towards an initial corpus of Rs 500 crore. The JV had projected a turnover of Rs 5,000 crore by 2010-11. The joint venture was hoping to tap the infrastructure sector, which includes express highways, airports and hi-tech construction involving power plants. It had also plans of bidding for modernisation of airports like Chennai and Kolkata. Another important role that the joint venture construction firm was expected to play was to take charge of all DLF's construction activities.
However, with a changed scenario during the downturn, DLF, like most real estate firms, had to take a relook and restructure its business plans. It is reeling under huge debt, currently its net debt stands at Rs 13,958 crore. As part of its plans to service debts, DLF recently raised Rs 3,860 through stake sale by the promoters.
It is also under pressure from dip in bottomlines.
For the whole of 2008-09, DLF's net profit decreased by 41% at Rs 4,629 crore compared with Rs 7,812 crore in the previous fiscal. DLF reported a 93% plunge in consolidated net profit for the fourth quarter of 2008-09 at Rs 159.05 crore.
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