The promoters will re-invest a significant part of the amount realised from the sale in DLF Ltd. The decision was taken by the DLF's board of directors in its meeting held here yesterday based on the recommendation by the audit committee, which was set up last year to suggest ways to drive the growth of rental business.
According to market sources, the valuation of promoters 40 per stake in DLF Cyber City Developers Ltd (DCCDL) could be around Rs 12,000-14,000 crore. In late 2009, DLF had announced merger of its subsidiary CCDL with promoters firm Caraf Builders and Constructions.
DCCDL had then issued CCPS (compulsorily convertible preference shares) worth Rs 1,597 crore to promoters. Post conversion, promoters would have 40 percent stake in DCCDL, which holds bulk of the DLF’s commercial assets.
"With this proposed transaction, DLF will be able to achieve three of its main objectives -- removal of conflict of interest, creation of a rental platform with large financial investors and reducing substantial portion of debt. It's killing three birds with one stone," DLF Senior Executive Director Finance Saurav Chawla told reporters.
DLF would be able to create REITs in the capital market in partnership with the long term financial investors, he added. The promoters stake in DLF, which stands at 75 percent, could increase post this investment, sources said.
To resolve the issue of CCPS held by promoters in DCCDL DLF in a filing to the BSE said that the board approved the recommendations made by the audit committee to sell promoters stake in DCCDL to institutional investors. The filing did not give any valuation of the promoters equity stake in DCCDL.

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