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DLF unit to sell wind energy projects in Tamil Nadu, Rajasthan

According to reports, DLF Ltd, India’s largest property developer by market value, is selling more wind energy assets after the first such divestments in January as part of its ongoing strategy to exit areas that aren’t part of its main business to pare debt.

The company’s DLF Home Developers Ltd (DHDL) unit is set to sell its wind energy projects in Tamil Nadu and Rajasthan, the company informed BSE on Friday.

DHDL has signed an agreement with Tulip Renewable Powertech Pvt. Ltd to sell the 34.5 megawatt (MW) Tamil Nadu project along with related assets, liabilities and long-term loans for Rs.188.7 crore.

The 33MW Rajasthan wind mill will be sold to Violet Green Power Pvt. Ltd for Rs.52.2 crore on similar terms.

In January, the real estate firm sold its 150MW wind turbine project in Gujarat to Bharat Light and Power Pvt. Ltd for Rs.282.30 crore.

After struggling with a large amount of debt for some years now, property analysts said DLF seems to be on track with debt reduction and operations though it may take a while before it can clean up the balance sheet.

DLF said last year that it plans to reduce debt by around Rs.5,000 crore by March 2013 and analysts said that it may have achieved this target. In the December quarter, DLF said it reduced net debt by Rs.1,870 crore to Rs.21,220 crore.

A DLF spokesperson said on Friday that the company can’t make forward-looking statements because it plans an institutional placement programme (IPP).

In 2012-13, the developer closed some big-ticket transactions including selling Amanresorts for around Rs.1,641 crore and a piece of prime land in central Mumbai to Lodha Developers for Rs.2,700 crore. It also sold its entire stake in Adone Hotels and Hospitality to a Kolkata-based consortium, Avani Projects and Square Four Housing and Infrastructure, for Rs.567 crore last June.

“Some of the money from the Amanresorts deal would have come into the March quarter. Once the entire money from Amanresorts and its wind energy projects come in, the debt would reduce quite a bit,” said an analyst at a Mumbai-based brokerage, asking not to be named.

The Gurgaon-based developer saw its December quarter profit rise 11.5% to Rs.288.44 crore from the year ago. However, it posted a 35.6% drop in operational income to Rs.1,310 crore in the same period.

A 28 February SBICAP Securities Ltd report said that DLF plans to launch high value projects in Phase V of Gurgaon which is expected to help in improving cashflows.

“Reduction in net debt is expected to reduce the interest expense which will aid in better cash flows,” the report said.

DLF shares fell 0.98% to close at Rs.232.95 per share on Friday on the BSE, while the benchmark index, Sensex dropped 0.32% to close at 18450.23 points and the BSE Realty index, fell 0.31% to close at 1770.2 points.

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