DAL firms up debt reshuffle plans

DLF Assets Ltd (DAL), a sister concern of real estate and construction major DLF Ltd, is reported to have finalised terms with private equity investors to raise $450 million (Rs1,800 crore).

At the same time, it has repaid loans to the tune of nearly Rs1,000 crore during December to various banks. It has also raised close to Rs1,750 crore from a clutch of banks including PNB and SBI, it is learnt.

Reports say efforts are on to close the deal by January end. However, DAL is also working on a backup plan in case PE funding doesn't work out. This would involve raising Rs 3,000 crore via lease rental discounting by March end.

DAL, promoted by K P Singh and his family, has a contract with DLF Ltd to buy 20-million sq ft of grade 'A' commercial space by the end of this financial year. DAL had earlier tried to enlist a Real Estate Investment Trust (RIET) in Singapore, but the move failed.         

Thus, DLF Ltd has reshuffled a part of its growing debt by replacing short-term loans with borrowings that mature later and carry a lower rate of interest. It had borrowed Rs 1000 crore from the Punjab National Bank and Rs 750 crore from the Life Insurance Corporation of India Ltd (LIC) in December at 13-14 per cent and repaid up to Rs 1100 crore of short-term debt.

DLF had a consolidated debt of around Rs14,000 crore as of September 2008. According to credit rating agency Fitch, some Rs6500 crore has to be repaid in 2009.