DLF founders sell 9.9-per cent stake to buy shares in sister firm
13 May 2009
The founders DLF Ltd sold a 9.9 per cent stake in India's biggest real estate company, raising Rs3,860 billion ($783 million). Investment funds controlled by vice chairman Rajiv Singh and his family offered the stake in the New Delhi-based company, according to a sale document sent to investors. Some 168 million shares were sold for Rs230 each, according to data on Bloomberg.
The Singh family, DLF's biggest investor, is selling part of its stake at a time when a slowdown in India's economy has depressed the real estate market. Home prices may have dropped by as much as 40 per cent across India in the three months to 31 March, according to estimates from Jones Lang LaSalle Inc.
''You'd appreciate that this was a painful and sentimental decision,'' Singh said in an interview on CNBC-TV18 television. DLF would have preferred to sell shares ''when the world was more normal,'' he said.
The founders plan to use the proceeds from the sale to raise their stake in DLF Assets Pvt Ltd by acquiring D E Shaw's shares in the unit, the company said in a separate statement to the Bombay Stock Exchange. Chairman Kushal Pal Singh and his family own about 88.6 per cent of DLF Ltd as of 31 March, according to the Bombay Stock Exchange.
In November last year, a fund backed by Lehman Brothers Holdings Inc sold its stake in DLF Assets to Symphony Capital Partners. Symphony, which holds the stake through a separate unit, now owns 60 per cent of the $1.1 billion investment in DLF by overseas firms, vice chairman Singh said, while D E Shaw owns about 40 per cent.
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