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DLF to raise $2bn in fire sale

India’s largest listed developer is reportedly preparing to sell non-core assets over the next three years to repay more than $2.8bn of debt. DLF founders this week sold 10% of the development company to raise cash to buy out private equity firm DE Shaw from property trust, DLF Assets.

DLF, India’s largest listed developer, is planning to raise more than $2 billion from asset sales over the next three years, according to a Reuters report.

Sanjey Roy, a senior general manager with the developer, said it planned to raise INR100 million (€1.5 billion; $2 billion) over the next few years.

The report said DLF’s debt stood at INR139.6 billion as of the end of March, equivalent to $2.8 billion.

DLF plans to repay INR75 billion by selling non-core assets such as its wind power unit and from part collection of the money owed to it by a property trust, DLF Assets Ltd, the report said.

Earlier this week, DLF founders and family sold almost 10 percent of the company in an effort to raise INR38.6 billion ($779 million) in what the firm billed as the “largest equity transaction in the Indian real estate sector”.

That equity injection will reportedly be used to buy out private equity firm DE Shaw’s stake in DLF's privately held properly trust, DLF Assets Private Ltd (DAL), DLF said. DE Shaw invested more than $400 million in DLF Assets in 2007, alongside a raft of other investors, including a Lehman Brothers fund.

At the time, chief financial officer of DLF Assets Ramesh Sanka said the equity was not enough to fuel the company’s growth plans, with the firm set to acquire 5.5 million square feet of property from parent DLF, in addition to 7 million square feet of property in 2007 alone. Sanka added that DLF Assets planned to buy 10 million square feet each year and converted into a REIT once legislation allowed.

India’s property boom came to a crashing halt with the credit crisis last year, leaving DLF facing a multi-billion dollar debtload.