DLF welcomes SAT order, firm says board to decide on fund-raising

The relief from the SAT could also enable the company to convert Compulsorily Convertible Preference Shares (CCPS) held by its promoters as the deadline for same is March 2015. New Delhi Realty major DLF today hailed the Securities Appellate Tribunal order quashing the 3-year market ban imposed by Sebi on it and said the board will decide on the fund raising plan through REITs and other securities. India's largest realty firm has already announced plans to list two Real Estate Investment Trusts (REITs) for its rent-yielding commercial assets. It is "DLF Limited is yet to receive the SAT judgement, which has set aside the SEBI order against the company. DLF and its Board were guided by and acted on the advice of eminent legal advisors, merchant bankers and audit firms while formulating its offer documents in 2007. We have full faith in the judicial system and we always abide by its order," the company said in a statement. When asked about the fund raising plans after quashing of the Sebi order, DLF group executive director Rajeev Talwar said "We are yet to receive the full copy of the order. After that, our legal counsel and experts will take the matter before the board of director for the course of action to be followed." Last month, DLF had said it will form two REIT platforms to tactically monetise almost 30 million sq ft of commercial assets, thereby increasing cash flows and reducing debt. It further said that one REIT platform would be for office and other for retail asset. The company is in talks with both strategic and financial investors interested in partnering with the company for REIT. The relief from the SAT could also enable the company to convert Compulsorily Convertible Preference Shares (CCPS) held by its promoters as the deadline for same is March 2015. CCPS have to be converted into ordinary shares after a predetermined date. Post conversion of CCPS in equity shares, DLF promoters will have 40% economic interest in DLF's commercial arm DLF Cyber City. In late 2009, DLF had announced merger of its subsidiary DLF Cyber City Developers with promoters firm Caraf Builders and Constructions, the holding company of DLF Assets Private Limited DLF Cyber City Developers had then issued CCPS worth Rs 1,5970000000 to the promoters. Meanwhile, in a filing to the BSE, DLF informed that "by a majority Judgement, the Securities Appellate Tribunal (SAT) has on March 13, 2015 quashed the Order dated October 10, 2014 passed by SEBI and allowed the appeals filed by DLF, its Directors and erstwhile CFO against the said Order". "There was a perceptional overhang due to SEBI order. With SAT order, now our stand has been vindicated. We will always comply with all the regulations in letter and spirit," DLF Executive Director Finance Saurabh Chawla told PTI. Quashing the Sebi order, the tribunal ruled that no gains were made by the company and its executives in withholding the information. Sebi had restrained DLF from accessing the securities market, directly or indirectly, for a period of three years, the filing added. In view of the SEBI ban and slowdown in the real estate demand, DLF has been looking for private equity funding at project level to boost cash-flow. The company announced plans to divest around 50% stake each in four new housing projects to private equity firms for over Rs 3,0000000000. Last month, DLF had reported 9% decline in consolidated net profit at Rs 131.790000000 for the quarter ended December against Rs 145.290000000 in the year-ago period. Income from operations fell 5% to Rs 1,956.720000000 for the third quarter of this fiscal from Rs 2,058.420000000 in the corresponding period of the previous year. DLF has a land bank of about 295 million square feet, of which 50 million square feet is under development. PTI