New Delhi, Nov 12 (PTI) Net debt of India's largestrealty firm DLF rose by Rs 900 crore during the Septemberquarter to Rs 26,800 crore and the borrowing could risefurther to meet construction cost of its ongoing projects amida demand slowdown in the property market.
DLF expects to reduce its debt significantly from theproposed infusion of over Rs 13,000 crore into the company bythe end of this fiscal, mainly from promoters' stake sale toGIC.
Net debt increased to Rs 26,799 crore as on September 30,2017, from Rs 25,899 crore at the end of the previous quarter,DLF said during an investor presentation.
The company had a negative cash flow during the secondquarter of this fiscal as it stopped sales bookings duringMay-October, but continued construction of its projects.
"Operating shortfall shall continue till new sales volumeand collections pick up while at the same time constructionspend shall continue.
"Continued capex in new office complexes and constructionspend on residential (units) shall result in temporarynegative cashflow and spike in net debt levels for whichfinancing is already in place," the presentation said.
On sales bookings, the company said it had suspendedsales in May 2017 taking a cautious, conservative approach tounderstand the rules and regulations under the real estateregulatory Act and GST. New sales booking have now beenopened with effect from November 1.
The company said operating cash deficit of about Rs 750crore per quarter will continue for the next two quarters.
DLF's CFO Ashok Tyagi had earlier said the company has anunsold inventory of about Rs 15,000 crore.
"Out of 15 million sq ft under construction in ourresidential business, 13 million sq ft will be completed byMarch next year. Around 8 million sq ft is ready to be handedover to customers shortly," Tyagi had said.
On the debt reduction, the company is banking on infusionof funds from promoters.
In late August, the DLF promoters decided to sell theirentire 40 per cent stake in the company's rental arm DLF CyberCity Developers Ltd (DCCDL) for Rs 11,900 crore.
This deal included sale of 33.34 stake in DCCDL toSingapore's sovereign wealth fund GIC for Rs 8,900 crore and abuyback of the remaining shares worth Rs 3,000 crore by DCCDL.
Post this deal, DLF will have 66.66 per cent stake in DCCDL.
Yesterday, DLF said it expects the sale of its promoters'stake to GIC to be concluded by December and infusion ofproceeds into the company by February 2018.
DLF expects infusion of over Rs 13,000 crore into thefirm, which will include Rs 10,500 crore from promoters andanother Rs 3,000 crore from institutional investors tomaintain the minimum public shareholding.
The deal has been approved by DLF's public shareholdersas well as fair trade regulator CCI.
"We are hopeful of concluding this deal and subsequentinfusion of funds into DLF within this fiscal," DLF's SeniorExecutive Director (Finance) Saurabh Chawla had said.
The promoters will receive the proceeds this calendaryear and will infuse funds into DLF by February 2018, headded. PTI MJHARD.
This is unedited, unformatted feed from the Press Trust of India wire.