DLF restructures existing loans to cut interest charges and aims to save Rs 300 crore a year

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NEW DELHI: DLF Ltd, the country’s largest property developer, is restructuring existing loans in a bid to save Rs 300 crore a year, taking advantage of the favorable interest rate environment, a senior executive at the company.

DLF’s gross debt at group level is close to Rs 25,000 crore and the company is considering an interest rate cut of 120 basis points.

“In March 2020, most of our loans were at 9% interest rate, in December we reduced it to 7.5%,” Ashok Kumar Tyagi, full-time director at DLF, told ET. ltd. “Our existing lenders are offering aggressive rates. We estimate that the average interest rate should be around 7.5%”.

“It almost translates to savings of Rs 300 crore on an annualized basis,” Tyagi said.

The company, which operates nearly 35 million sq. by December 2021.

While two properties that are already part of DCCDL will soon become operational, the company will also contribute three to four other assets that are currently under DLF.

“We continue to maintain a significant overhead reduction, enabling margin improvement going forward. Overhead outflows were down 35% in the first half of fiscal 2021. We expect to maintain this at levels for exercise,” Tyagi said.

“We have worked hard to reduce interest costs by negotiating all of our credit facilities across the group,” he added.

DLF has developed 153 real estate projects with a total area of ​​approximately 330 million square feet.

Nearly 40 million square feet of commercial rental assets will be placed under REIT by DCCDL, a joint venture between DLF and Singapore’s sovereign wealth fund.

The company will soon appoint an advisor and will be ready for the REIT within the next 12 to 15 months.

The company announced a 49% drop in net profit to Rs 228 crore for the quarter ended September, impacted by high fixed costs at a time when its operations had slowed down due to Covid-19.

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