A fund sponsored by Lehman Brothers Holdings Inc., which had invested $200 million (Rs980 crore today) in DLF Assets Ltd, a firm owned by the promoters DLF Ltd, has divested its stake to a unit of its co-investor, London-based Symphony Capital Partners Ltd.
DLF Assets buys and holds completed commercial assets of DLF, India’s largest listed developer. It received $1.15 billion in total from Symphony ($450 million), DE Shaw and Co. Lp. ($400 million) and Lehman Brothers ($200 million) over the last two years.
Sales of commercial real estate projects to DLF Assets made for 46% of DLF’s profit before tax in the quarter to September. DLF Assets owes Rs4,804 crore to DLF as payments for assets bought.
“SC Asia, a subsidiary of Symphony Capital, picked up the Lehman stake,” a senior DLF executive said on Monday, asking not to be named. Gautam Gulati, a New Delhi-based principal of Symphony Capital, said he was not aware of the transaction, adding his firm’s Singapore office would deal with this.
Earlier in the day, DLF vice-chairman Rajiv Singh, on a call with analysts, hinted Symphony was the buyer of the Lehman stake. “Lehman (investment) was bought over directly by other shareholders in DLF Assets… Not by the promoters of DLF Assets,” he said.
Symphony now holds about 60% of the private equity-owned stake in DLF Assets and DE Shaw 40%, he added. DLF Assets does not disclose the private equtiy stake in it or the promoters’ holding.
DLF Assets had plans of going for an overseas listing as a real estate investment trust in Singapore to pay DLF for the assets it has bought from its parent. The plan was postponed after a global equities meltdown turned new share offers less attractive and real estate firms found few investors.
Singh said DLF Assets is now looking at raising Rs5,000 crore through a mix of debt and equity by March 2009. “We are taking steps to secure debt funding,” Singh said. “In the next quarter, we expect to complete the debt funding if not equity funding.” DLF Assets will borrow on assets.
DLF has sold 19 million sq. ft of office space to DLF Assets, which includes both completed office space and ongoing construction projects.
DLF Assets expects to deliver 10 million sq. ft by March 2009, yielding rentals of Rs600 crore a year, according to a presentation on DLF’s website. The remaining 9 million sq. ft is due to market by March 2010. DLF Assets currently has 4.75 million sq. ft in completed assets.
DLF shares rose 14.89% to Rs253.05 on the Bombay Stock Exchange, on a day when its benchmark Sensex index expanded 5.62% and the bourse’s realty index rose 3.31%.
Source: Livemint