The credit rating agency CRISIL downgrading India's largest real estate company DLF's debt programmes and terming the outlook negative.
The degrade might force DLF Ltd to accelerate the sell-off of its land banks and other assets in order to deleverage its reduce pile.
In fact, DLF Ltd recently announced that the company and its partner have sold an IT SEZ in Pune to private equity firm Blackstone for Rs. 810 crore, as part of an ongoing programme to divest ‘non-core' assets.
Recent sale is the second such deal this December (2011) month. DLF Ltd recently also announced the receipt of proceeds from divestment of Noida IT Park.
DLF Ltd , along with its joint venture partner in Galaxy Mercantile Ltd (Owner of IT park in Noida), received Rs. 200 crore towards the first tranche of infusion of capital from IDFC.
In other transaction, the DLF Ltd also sold a 28 acre plot of land in Gurgaon to developer M3M India for Rs .440 crore.
However CRISIL said,''Weit believed that “DLF's debt levels will remain huge and that the weak business environment will result in moderate operating cash flows, leading to weak debt protection metrics. DLF's debt levels will remain higher than, ours earlier expectations because of delay in divestment of non-core assets"
CRISIL also said, "While we had initially expected DLF's debt levels to decline, supported by divestment of non-core assets of Rs 2,500 crore in 2011-12, DLF has mustered divestment proceeds of only Rs. 400 crore in the first6 months of the fiscal".
As on September 2011, DLF Ltd's total debt stood at Rs. 25,450 crore. In fact, DLF Ltd's mounting debt has been a key monitoring metric for investors and analysts over the last few years.
Mr Ashok Tyagi, Group CFO, DLF Ltd said, ''Few quarterly deviations notwithstanding, the DLF Ltd was very focused on its divestment target. I am confident that with upcoming action on launches in Mohali, Lucknow and Gurgaon, and the progress made on sale of non-core assets, this particular action by the rating agency CRISIL will be corrected in the next few months”
We are welcome that change; It is good to DLF Ltd, Investors and House buyers..!
The degrade might force DLF Ltd to accelerate the sell-off of its land banks and other assets in order to deleverage its reduce pile.
In fact, DLF Ltd recently announced that the company and its partner have sold an IT SEZ in Pune to private equity firm Blackstone for Rs. 810 crore, as part of an ongoing programme to divest ‘non-core' assets.
Recent sale is the second such deal this December (2011) month. DLF Ltd recently also announced the receipt of proceeds from divestment of Noida IT Park.
DLF Ltd , along with its joint venture partner in Galaxy Mercantile Ltd (Owner of IT park in Noida), received Rs. 200 crore towards the first tranche of infusion of capital from IDFC.
In other transaction, the DLF Ltd also sold a 28 acre plot of land in Gurgaon to developer M3M India for Rs .440 crore.
However CRISIL said,''Weit believed that “DLF's debt levels will remain huge and that the weak business environment will result in moderate operating cash flows, leading to weak debt protection metrics. DLF's debt levels will remain higher than, ours earlier expectations because of delay in divestment of non-core assets"
CRISIL also said, "While we had initially expected DLF's debt levels to decline, supported by divestment of non-core assets of Rs 2,500 crore in 2011-12, DLF has mustered divestment proceeds of only Rs. 400 crore in the first6 months of the fiscal".
As on September 2011, DLF Ltd's total debt stood at Rs. 25,450 crore. In fact, DLF Ltd's mounting debt has been a key monitoring metric for investors and analysts over the last few years.
Mr Ashok Tyagi, Group CFO, DLF Ltd said, ''Few quarterly deviations notwithstanding, the DLF Ltd was very focused on its divestment target. I am confident that with upcoming action on launches in Mohali, Lucknow and Gurgaon, and the progress made on sale of non-core assets, this particular action by the rating agency CRISIL will be corrected in the next few months”
We are welcome that change; It is good to DLF Ltd, Investors and House buyers..!
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