Mumbai: Real estate major, DLF has initiated a process to sell 50% of its subsidiary, DLF Cyber City Developers (DCCD) to raise over Rs 3,500 crores, sources with direct knowledge share. Constrained by the Sebi order which bans DLF from any capital market transaction for 3 years, cash-strapped DLF has few options for fund raising.
DLF is in talks with strategic players and investors like Blackstone, Brookfield Global for the transaction. DLF has challenged Sebi's order in the Securities Appelate Tribunal but in the interim is looking for various options to raise cash as the clock is ticking on its debenture conversion deadline of March 2015.
Promoters of DLF hold 40% in DCCD through compulsory convertible preference shares (CCPS) issued in 2009 which would require Rs 2,500-3,000 crores, according to sources. Earlier plan was a share swap through which the promoters KP Singh and family would have increased their stake in the parent company, DLF. Under the Sebi order DLF cannot take the share swap route to acquire the remaining shares in Cyber City subsidiary.
At the time of merger of DLF Assets with Cyber City arm in 2009, DLF had planned an eventual listing of the arm on Reits or Real Estate Investment Trusts but now the company is restricted from going ahead with that plan post the Sebi ban.
When contacted by ET NOW, DLF's spokesperson said, "your information is incorrect, there is no such move."