India’s largest listed developer, DLF Ltd, is set to acquire a property trust owned by its founders K P Singh and family for around 100 billion rupees (S$3 billion), The Economic Times reported yesterday.
The transaction will be done through DLF Cyber City, a wholly-owned unit of DLF, the paper said citing two unidentified executives involved in the transaction. According to the proposed deal, DLF Cyber City will acquire Caraf, an investment firm owned by K P Singh and family, which owns DLF Assets, the news report said citing an unidentified senior DLF executive.
The move is aimed at repaying some of DLF Assets’ debt and bring the commercial properties of the group under DLF, the Financial Express newspaper said. The deal will be a combination of cash and equity, it said.
DLF said in a notice to the stock exchanges yesterday that its board would meet today to consider integration of Caraf Builders & Constructions Pvt Ltd and its subsidiaries with DLF Cyber City.
The Economic Times report said that DLF Cyber City will issue fresh shares to the founders, who will own 38 per cent in this unit after the transaction, while DLF’s holding will go down to 62 per cent. The equity value of the deal is around 25 billion rupees, it said.
A spokesman for DLF told Reuters he would not be able to provide comments other than what was already in the company’s notice to the stock exchanges. ‘The full details will be known on Tuesday,’ he said.
Last week Indian newspapers reported that hedge fund DE Shaw had sold a 36 per cent stake in DLF Assets to its founders for US$500 million. Earlier this month, The Economic Times had reported that the property trust would be listed in Singapore by June next year to raise US$1.2 billion.
Source: Business Times, 15 Dec 2009
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