DLF Ltd, the country's largest real estate company, is set to sell its hotel subsidiary to Kolkata-based Square Four Housing & Infrastructure Private Ltd for Rs550 crore, its third divestment in the last three month as it disposes non-core assets to pare its Rs22,500 crore debt.
The Delhi-based real estate company had acquired Hilton International's 26% stake in DLF Hotels & Hospitality forRs120 crore and is now the sole owner of the hotels unit which own land parcels in four cities — Kolkata, Chennai, Mysore and Thiruvananthapuram as per a report in ET by Arun Kumar.
This subsidiary's assets do not include Aman Resorts, another non-core asset that DLF has been trying to sell for a long time. Two persons with direct knowledge of the transaction said DLF has signed a non-disclosure agreement with Square Four and expects to conclude the deal by third week of January 2012.
The stake purchase from Hilton was a precursor to a total selloff, they said. "We are in discussion with DLF and cannot comment until we achieve the financial closure of the deal," said Square Four Housing chairman and managing director Ganesh Singhania. The DLF spokesperson declined to comment.
DLF Hotels would be the third big-ticket asset sale by the realty giant in the current fiscal. Earlier this month, it completed the sale of its IT Park in Noida to IDFC for Rs512 crore. A couple of months ago, DLF divested a 28-acre land parcel in Gurgaon for Rs400 crore.
One of the persons familiar with the development said Square Four has already paid a part of the financial consideration and expects to complete the deal by third week of January. It is in discussions with financial institutions to raise resources to fund the transaction, said this person.
Square Four will develop the Kolkata and Chennai land parcels for hotel-cum-commercial-cum-residential projects while the land in the other two centres — Mysore and Thiruvananthapuram — will be developed as pure luxury hotels.
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