DLF’s Mumbai Dreams Grounded Debt-laden realtor to sell 17.5-acre land to Lodha JV for . 2.8kcr

DLF, the country's largest developer, will sell its 17.5-acre land in Mumbai's Lower Parel to Lodha Group and a private equity player for about . 2,800 crore, ending its long-drawn bid to break ground in India's financial capital. 

The deal will help the Delhi-based builder pare part of its burgeoning debt that had reached . 22,725 crore by March 31, a top company official said. "The legal documentation will be completed in the next one week," he said. 
The buyers have paid an advance, and the final terms of the deal are currently being worked out, the person said. 
DLF will get the entire . 2,700-2,800 crore in one go within two months. 
The cash-rich Lodha Group, which is building the world's tallest residential tower in Mumbai, will bring in . 1,000 crore, while the balance will be paid by the PE fund, the person said without naming the private equity fund. Lodha Group MD Abhisheck Lodha confirmed he is part of the transaction, but refused to share details of the deal. "We aren't in a position to give any comments on the transaction," he said through a mobile text message. A spokesperson for DLF said the company does not comment on speculation. 
DLF bought the land for . 702 crore in an auction in 2005 from state-owned National Textile Corporation. It had changed its developmental plans for the plot thrice—from building a retail mall to commercial office buildings to finally a residential project—before it decided to sell it a year ago. 
DLF and many other builders piled up huge debt when demand for residential and commercial property fell during the 2008-09 slump after years of boom when the sector grew rapidly. Realtor Selling Non-Core Assets to Pare Debt 
The company is in the process of selling several non-core assets including land parcels, SEZs and some office buildings, to reduce its debt. 
DLF had been trying to sell the Lower Parel land for about a year, but was finding it difficult to get the right value. 
Potential buyers renewed interest in the asset after new development control rules in Mumbai were notified in January, which cleared the air about how much space can be built on the land parcel and the amount of extra FSI that can be bought. Lodha and DLF have been in talks for three months. Other builders such as Vallabh Sheth, Piramal, Runwal and the Wadhwa Group, and sovereign funds like GIC and Macquarie too had shown interest in the land. Lodha—which has several landmark projects in the Lower Parel area including the 117-storey World One residential tower—plans to build a high-end residential project at the new location, an official said. 
Besides luxury homes, the company may also construct houses for the mid-income group because of a glut of top-end apartments in central Mumbai, the person said. A recent ET report showed that close to 60% of Mumbai's luxury apartments, under-construction and fully-built, remain unsold because of rising prices and oversupply. There are currently 3,300 luxury apartments being developed in Mumbai. Lodha-DLF deal will be the largest land deal where the seller gets the entire payment in one go. BPTP's Rs 5,006-crore buy of a land parcel on the Noida Expressway, which is the largest deal so far in the country, involved staggered payments over several months and years. 
DLF is also working on two other-high value transactions, including the sale of the luxury hotel chain Aman Resorts (barring the Delhi property) and its wind power business, to raise over Rs 3,000 crore. 
In an analyst call after its fourth quarter results, the company's management said it has increased the overall target for asset divestments by an additional Rs 5,000 crore in the medium term. 
DLF's net profits dipped 26.8% in 2011-12. In 2011-12, it managed to raise only Rs 1,774 crore through asset sales against a target of Rs 5,000-6,000 crore and reduced its debt by Rs 33 crore in the fourth quarter of fiscal year 2012. 
The company raised Rs 1,200 crore during the October-December quarter by selling an IT park in Noida to IDFC and an IT SEZ in Pune to Blackstone. It also sold two land parcels in Gurgaon in the same quarter. DLF's stock closed at Rs 194.60, down 1.52%, on Friday.