DLF Assets Secures $450 Million Investment from Symphony Capital
DLF Assets, the property fund of DLF Ltd, India's largest real estate developer by market capitalisation, has successfully raised $450 million from London-based investment firm Symphony Capital. This significant investment comes on the heels of previous funding rounds, including $200 million from a Lehman Brothers-sponsored fund and $400 million from global investment firm DE Shaw for a Special Economic Zone (SEZ) project.
Representation on the Board of Directors
As part of the investment agreements, the investors have obtained representation on the board of directors of DLF Assets. Notably, DLF Assets Pvt. Ltd. (DAPL) operates independently of its parent company, DLF Ltd, and was established to facilitate bidding on potential asset sales by DLF Ltd.
Planned Listing and Debt Repayment
Initially, DLF Assets had planned to list as a real estate investment trust in Singapore, aiming to raise $1 billion through the public issue. However, due to unfavorable market sentiments and a global market slowdown, the listing was postponed. The company had amassed a significant debt to DLF Ltd, with plans to repay a substantial portion through the proposed listing. Although DLF Assets has paid off the majority of its debt for the last year, it still owes approximately ₹1,900 crore.
Implications of the Fresh Infusion
The new investment from Symphony Capital will enable DLF Assets to partly pay off its outstanding debt to DLF Ltd. In a related development, DLF Ltd has reversed the sale of ₹1,500 crore worth of office assets to DLF Assets, resulting in a reduction of ₹800 crore in the Profit Before Tax (PBT) for the quarter ended March 2007. The reversal of the sale was necessitated by the properties not qualifying as IT/ITeS SEZs. This decision will ultimately benefit DLF Ltd, as DLF Assets will now focus on holding only IT/ITeS properties.