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National: DLF-Lodha deal, part of DLF’s plan to reduce debt

Recently in real estate circle, the news that Lodha Developers acquired a prime land of around 17 acres in Mumbai. This is a step taken by debt struck DLF to reduce its debt of as much as INR22,680 crores.
As per some media reports, the deal was for INR2,725 crores.

However, in Economic Times, the number is INR2,727 crores. As per its detailed article, in 2005 DLF purchased this land for INR703. Few years ago, DLF received INR500 crores in advance from Lodha Group as part of this purchase. The transaction got complete on 1 November 2012, when Lodha paid the rest of the amount.
If media reports are to be believed, at the end of first quarter of the fiscal year 2012-2013,  DLF’s total debt stood at INR22,680 crores.

Ashok Tyagi, CEO – DLF, is stated to have affirmed that the company targets to reduce its debt to around INR13,000 crores. The stategy is to sell its non-core assets including Aman Resorts at the end of this fiscal. A formal announcement will be made in a few weeks’ time.
Although DLF is undoubtedly India’s largest real estate company and is known to have made realty landmarks, these appear to be tough times for the company. Having mentioned that, given their strategy, these property transaction can be beneficial towards all the concerned parties.

 

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