Millennium Post

DLF to save Rs 175 cr annually as promoters cut CCPS coupon rate

DLF to save Rs 175 cr annually as promoters cut CCPS coupon rate
DLF will save about Rs 175 crore annually after promoters decided to slash coupon rate on securities held by them in realty major's subsidiary from 9 per cent to 0.01 per cent, a senior company official said.

Last week, DLF promoters deferred till March 2016 conversion of the compulsorily convertible preference shares held in DLF's arm DLF Cyber City Developers Ltd. Promoters also slashed the coupon rate from 9 per cent to 0.01 per cent.

"The annual savings due to reduction in CCPS coupon rate from 9 per cent to 0.01 per cent will be approximately Rs 175 crore," DLF Chief Financial Officer Ashok Tyagi said.

In late 2009, DLF had announced merger of its subsidiary DLF Cyber City Developers with promoter
firm Caraf Builders & Constructions, the holding company of DLF Assets.

DLF Cyber City Developers had then issued compulsorily convertible preference shares worth Rs 1,597 crore to DLF promoters.

Post-conversion of compulsorily convertible preference shares into ordinary shares, promoters would have 40 per cent stake in DLF Cyber City Developers, which holds bulk of the DLF's commercial assets. DLF has about 30 million square feet of commercial area with an annual rent of over Rs 2,000 crore.

The deadline to convert these conversion of the compulsorily convertible preference shares into shares was March 19 this year, but the same could not be executed in view of SEBI's order in October 2014 banning DLF and six executives from capital market for the next three years.

The SEBI order was quashed last week by the Securities Appellate Tribunal (SAT). Tyagi said that the promoters decided to defer the CCPS conversion as only few days were left to meet the March 18 deadline. He said the future course of action on the compulsorily convertible preference shares conversion would be decided after the recommendation of the audit committee set up by the DLF to suggest growth of its rental business RentCo.
PTI

PTI

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