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| Edited By: |Source: Reuters |Updated: Mar 17, 2018, 02:10 AM IST
DLF Ltd, India's largest listed developer, said on Wednesday its board had approved absorbing DLF Assets, owned by the founders of DLF, in a cashless transaction.
DLF Assets, which operates rental assets and owns a property trust, is reviving plans for a Singapore listing of its real estate investment trust, DLF Property Trust, aiming to raise between $500 million to $1 billion, sources told Reuters on Tuesday.
DLF will take over DLF Assets by merging the latter's holding firm, Caraf Builders and Constructions Private Ltd, with DLF Cyber City Developers, a wholly-owned unit of DLF, it said in a statement to the stock exchanges.
As a result, DLF's founders, who now own all of Caraf, will get a 40% stake in the merged company, under a cashless deal.
The company did not assign any financial value to the deal. It was advised on the transaction by Kotak Mahindra Capital and Enam Securities, and Citigroup gave a fairness opinion on the exchange ratio.
DLF said the deal was aimed at consolidating rental assets and boosting cash flows, removing perceived conflicts of interest between promoter firms and the company, and enhancing the potential of various rental assets.
Caraf and its units owns four rent-yielding properties with total leased area of 3.3 million sq ft. DLF Assets owns four special economic zone (SEZ) properties with leased area of 6.4 million sq ft, and DLF Cyber City operates 6.7 million sq ft of built out space across commercial buildings and malls.
DLF's founders raised $783 million by selling shares earlier this year to inject capital into the property trust and also to buy private equity firm DE Shaw's stake.
At noon (0630 GMT), shares in DLF, valued by the market at about $14 billion, were down 0.2% at Rs380.40 in the Mumbai market that was down 0.1%.
