DLF to consider selling majority stake in DLF Brands

New Delhi: The board of realty major DLF will consider plans to dilute the majority stake in wholly-owned retail management subsidiary DLF Brands Ltd (DBL), reports PTI.

According to sources, DBL would issue preferential shares worth about Rs100 crore, probably to a promoter group firm.

In a filing to the Bombay Stock Exchange (BSE) last week, the realty major had said its board "at its meeting on 28th July, may consider, review and recommend the proposal for further issue of equity shares by its wholly-owned subsidiary DLF Brands Ltd (DBL)."

DBL would issue the equity shares to a promoter group company or any other strategic investors, it added.

"Upon further issue of preferential equity shares, DBL will cease to be subsidiary of DLF Ltd," the filing had said.

The country's largest realty firm would also be announcing its quarterly results today.

Meanwhile, DBL had earlier announced major expansion plans with the objective of having 600 retail stores, and bringing around 15 global brands to India by 2012-13 at an investment of Rs750 crore.

According to industry sources, the move is part of DLF's announced strategy to exit from non-core business and focus only on developing realty projects.

The company's board will "most probably" issue fresh equity shares to a promoter group company, they had said.

"After the board's approval, the matter will go to the Annual General Meeting (AGM) for shareholders' consent. Morgan Stanley and Enam Securities have conducted independent valuations of DBL," a source had said.

As per DLF's annual report for 2008-09, DBL had posted a net loss of Rs7.41 crore on a turnover of Rs47.39 crore.

Earlier, DLF had planned to raise Rs2,700 crore this fiscal through the sale of non-core assets as part of its plans to reduce net debt of Rs16,421 crore by Rs5,000 crore.

DLF had decided to raise Rs5,500 crore last fiscal through sale of non-core assets, but was able to raise only Rs1,800 crore. It has decided to retain the wind energy business, valued at Rs1,000 crore, because of tax benefits.

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