INDIA BUSINESS WORLD - NOVEMBER 16th - NOVEMBER 30th
- 2007
MERRILL PICKS 49% IN 7 DLF PROJECTS
Merrill Lynch (ML) has acquired 49% equity stake in seven residential projects of DLF for Rs 1,481 crore. The real estate major has also diluted 49% stake in another residential project in Panchkula to Brahma Investments, a local investment company, for Rs 194 crore. Both these investments will be routed through two separate special purpose vehicles (SPV).
The seven projects in which Merrill Lynch has invested are at Chennai, Bangalore, Kochi and Indore, and are likely to be fully developed in 7-8 years.
"It is in sync with the company's strategic objective to have a focus on homes business over a 10-year development horizon. These deals will also help us unlock our investments in land for all the eight projects," DLF MD TC Goyal said.
The company has residential and commercial projects in all the major cities of the country, spread over 615 million sq ft. Some important projects that the company has bagged since it got listed include a 9,000-acre township at Bidadi near Bangalore and another township near Durgapur in West Bengal.
This is the first private equity infusion into DLF projects since the company was listed in June. In August, it formed a joint venture with Hines, a closely held US-based property investor, to develop an office, retail, hotel and entertainment project on a 15-acre site in Gurgaon. In October, DLF entered into a 50:50 JV with Dubai-based Limitless Holdings for developing a $15-billion township near Bangalore. The company is also looking at raising about $1.5 billion through an international debt issue, plans for which were approved by the company's board in October.
In August this year, the company closed the biggest private sector land deal in the country, acquiring a 38-acre land from DCM Shriram Consolidated (DSCL) for a whopping Rs 1,675 crore. The company has amassed a considerable land bank, and while getting investments, it is mainly the land commanded by the company that becomes the basis for equity sharing.
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