DLF to sell its hotel business

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3 Nov 2010
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In a significant shift in strategy, DLF plans to
sell developed properties, including five IT parks and its hotel
business, hoping to mop up Rs 7,000 crore in the next two years and
reduce its burgeoning gross debt of Rs 23,990 crore. According to a
report in The Economic Times, over the last one-and-a-half years, the
real estate major had already sold some non-core assets such as hotel
sites in Delhi and Hyderabad as well as non-contiguous land parcels to
rake in around Rs 3,000 crore. But it has never sold its buildings and
other developed assets.

The company aims to become debt-free in
the medium-term. But to reduce its loan components and meet contingent
tax obligations that may go up to Rs 1,703 crore, it has almost doubled
its fund raising target from divestment of non-core assets. DLF's
original plan was to raise Rs 4,500 crore from sale of non-core assets,
but now plans to raise Rs 10,000 crore in the next two to three years.
With Rs 3,000 crore already in its kitty from sales of non-core assets
in the last eighteen months, it is now identifying properties to raise
the balance Rs 7,000 crore.

In DLF's luxury hotel chain, Aman
Hotel & Resorts, Ashok Tyagi , Chief Financial Officer, DLF said,
“The plan was to divest a majority stake. But the prestigious Aman Delhi
(formerly Lodhi Hotel) would not be covered by the stake sale.
Investment bankers are expected to get this mandate over the next couple
of months.”

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