DLF Acquires 29 Acres in Gurugram for Housing Project

New Delhi, Jan 25 (PTI) Realty major 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 official of DLF said the total consideration for the 29 acres of land will exceed Rs 825 crore.

The land has been mortgaged by realty firm IREO with some financial institutions.

DLF plans to develop a group housing project on the land located on 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/bond holder).

From these lenders, DLF has agreed to buy non-convertible, redeemable bonds issued by IREO (bond issuer).

"We have been working with the two lenders and the developer for almost 12 months trying to structure this transaction. Today, we have signed the documents to acquire the debt from these two lenders," DLF MD Ashok Tyagi said during a conference call with analysts.

He said it might take more than 12 months to bring this project to the market but it will be a very big addition to the portfolio.

"Rs 825 crore was the outstanding loan that the developer had with these two banks. Actually, the loan was about Rs 1,200 crore. The bankers agreed to take a hair cut as a one-time settlement.

"So, Rs 825 crore is what we have bought the loan at from the bankers," Tyagi said.

He said the company is in the process of finalising an agreement with the developer for acquisition of the 29 acres of land with the requisite FAR.

"Therefore, the consideration would be slightly higher than Rs 825 crore, which is the price at which we have bought these bonds from the current bond holders. Now, we are the lender," Tyagi said.

In the filing, DLF said the company intends to acquire the overall rights and interest of the land parcel admeasuring 29 acres having an estimated development potential of up to 7.5 million square feet.

Out of the total, DLF said 25 acres form part of the mortgaged land.

"Accordingly, the company has entered into an agreement with the bond holder, wherein the company will purchase these bonds at a negotiated consideration of Rs 825 crore and would assume the rights of the bond holder."

DLF said the company is purchasing the bonds as a strategic investment and would be looking at rights under the bonds documentation including enforcement, settlement with the bond issuer, after following due process of law and approvals and sanctions as may be required.

Further, the company said it would acquire rights and interest in the remaining 4 acres of land through separate binding agreements with the bond issuer and its certain land-owning companies.

Moreover, DLF informed that the bonds are secured in favour of Axis Trustee Services Ltd, acting for and on behalf of the bond holder on 72.36 acres of land situated in Gurugram, owned by the bond issuer.

"In view of the default committed by the bond issuer, the bond trustee, on behalf of the bond holder had initiated proceedings for recovery of its dues under the SARFAESI and conducted auctions of the mortgaged land," the filing said.