India's largest realty firm DLF today said it has reduced net debt by over Rs 2,500 crore to Rs 17,400 crore following proceeds from sale of luxury hotel chain Amanresorts, and a refund from DDA.
The net debt had increased to Rs 19,926 crore at the end of December quarter, from Rs 1,9508 crore as on September 30.
"Current net debt is at Rs 17,400 crore (approx). We maintain the FY14 guidance of net debt of Rs 17,500-18,000 crore," DLF said in an analyst presentation.
The debt level would continue in this range in short term.
In a conference call with analysts, DLF Chief Financial Officer (CFO) Ashok Tyagi said: "With closure of Amanresorts and settlement of Dwarka project with DDA, we have achieved our net debt guidance. Recovery on sales side will take couple of quarters. Rental business is growing well".
Since January this year, DLF said it has sold Amanresorts (barring Lodhi property) for USD 358 million (over Rs 2,200 crore) and also settled the dispute with the Delhi Development Authority (DDA) on the Dwarka Convention Centre project with refund of Rs 676 crore.
Tyagi also said that the company has booked a "pre-tax loss of Rs 400 crore" in the settlement with DDA for Dwarka project, which it bagged in 2007 but was later scrapped.
DLF had capitalised Rs 1,075 crore in this project while it got a refund of only Rs 675 crore from the DDA.
Tyagi said the company's large mall in Noida comprising 1.8 million sq ft would be launched by October this year. The leasing has been finalised.
DLF said the first phase of divestment of non-core assets, has been completed, but company would continue to sell some smaller assets to fill any gap in cash flow.
When asked about plans to launch Commercial Mortgage Backed Security (CMBS) to replace costlier debt, DLF Executive Director (Finance) Saurabh Chawla said the company would soon get the provisional rating for CMBS from rating agencies and the issue for one retail asset could come in this quarter.
In October, the company had announced plans to raise about Rs 1,000 crore through issue of securities backed by mortgage of two retail assets.
"Worsening economic conditions during last 2 quarters and continued high interest rates has led to muted sales and profits. Current forecast is that these adverse economic conditions shall continue through Q2FY15," DLD said.