DLF Assets Plans About $1.5 Billion IPO in Singapore
By SANTANU CHOUDHURY and NIKHIL GULATI
NEW DELHI -- A delayed initial public offering of DLF Assets Pvt. Ltd., a property fund controlled by the founding family of DLF Ltd. will likely take place in Singapore during the quarter through March, a person with direct knowledge of the development said Tuesday.
DLF Assets, which buys
commercial property from DLF, India's biggest realty company by sales, plans to raise about $1.5 billion by listing its real estate investment trust, DLF Offices Trust, the person, who declined to be named, told Dow Jones Newswires.
"DLF Assets will use the IPO money mainly to reduce its debt," the person said, adding that
Citigroup Inc. is one of the advisers for the IPO.
A slowing economy crimped demand for offices and software industrial parks in India,
forcing DLF Assets to scout for various fundraising options to pay DLF, controlled by billionaire K.P. Singh and his family.
The global liquidity crunch and volatile stock markets worldwide also forced DLF Assets to keep its share sale plan in abeyance since 2007.
Separately, directors of DLF are discussing a proposal Tuesday to approve the merger of DLF Assets with the realty company's unit DLF Cyber City Developers Ltd.
Monday, DLF informed the Bombay Stock Exchange that the board will discuss integrating DLF Cyber City with another founder group company, Caraf Builders & Constructions Pvt. Ltd.
The founders hold a stake in DLF Assets via Caraf.
"The transaction could also lead to an increase in debt and preference capital issued for DLF and its subsidiaries by 50 billion rupees ($1.07 billion), taking the total liabilities to 200 billion rupees for the merged entity," Anand Agarwal, a Mumbai-based analyst at Credit Suisse, said in a note.
The structure will enable DLF to list assets internationally and monetize its investments in rent-yielding assets, he said.
Both Caraf and DLF Cyber City develop and lease out commercial properties.
U.S.
hedge fund D. E. Shaw & Co. had bought a 40% stake in DLF Assets in May 2007 for $400 million.
Last week, The Economic Times newspaper, citing sources in the company, reported that the DLF founders had bought 36% of DE Shaw's stake in DLF Assets for $500 million. Kari Elassal, a spokesman for D. E. Shaw declined to comment to an emailed query by Dow Jones.
Write to Santanu Choudhury at
[email protected]
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