DLF will buy 29 hectares of land in Gurugram for over Rs 825 cr for a housing project
Real estate giant DLF Ltd will acquire 29 acres of land in Gurugram from IREO to build a housing project after taking over bad loans worth Rs 825 crore related to the land.
A senior DLF official said the total compensation for the 29 hectares of land will cross Rs 825 crore.
The land has been mortgaged by real estate company IREO to several financial institutions.
DLF plans to develop a group housing project on land located at the golf course extension in Gurugram, Haryana.
In a regulatory filing on Thursday, DLF said it has entered into an agreement with Standard Chartered Bank, Singapore Branch, DB International (Asia), Singapore and Deutsche Investments India (lender/bondholder).
From these lenders, DLF has agreed to purchase non-convertible, callable bonds issued by IREO (bond issuer).
“We have been working with the two lenders and the developer for almost 12 months to structure this transaction. Today, we have signed the documents to assume the debts of these two lenders,” DLF MD Ashok Tyagi said during a conference call with analysts. .
He said it may take more than 12 months to bring this project to market, but it will be a very significant addition to the portfolio.
“Rs 825 crore was the outstanding loan the developer had with these two banks. In reality, the loan was around Rs 1,200 crore. The bankers agreed to a haircut as a one-time settlement.
“So Rs 825 crore is what we bought the loan for from the bankers,” Tyagi said.
He said the company is in the process of finalizing an agreement with the developer for the acquisition of the 29 hectares of land with the requisite FAR.
“Therefore, the consideration would be slightly higher than Rs 825 crore, which is the price at which we bought these bonds from the existing bondholders. Now we are the lender,” Tyagi said.
In the filing, DLF said the company plans to acquire the general rights and interests of the 29-hectare parcel with an estimated development potential of up to 7.5 million square meters.
According to DLF, 25 hectares of the total are part of the mortgaged land.
“Accordingly, the company has entered into an agreement with the debenture holder whereby the company will purchase these debentures for a negotiated consideration of Rs 825 crore and assume the rights of the debenture holder.”
DLF said the company is purchasing the bonds as a strategic investment and would look into the rights under the bond documentation, including enforcement, settlement with the bond issuer, after following due process of law and any approvals and sanctions.
Further, the company said it would acquire rights and interests in the remaining 10 acres of land through separate binding agreements with the bond issuer and its certain land-owning companies.
Furthermore, DLF informed that the bonds have been secured in favor of Axis Trustee Services Ltd, which is acting for and on behalf of the bondholder on 72.36 hectares of land located in Gurugram, owned by the bond issuer.
“In view of the default of the bond issuer, the bond trustee had initiated proceedings on behalf of the bond holder for recovery of its dues under the SARFAESI and conducted auctions of the mortgaged land,” the filing said.
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First print: January 26, 2024 | 12:18 pm IST