*DLF, the country's largest real estate company, today said that it has deferred several residential, hotel and commercial projects and retrenched an unspecified number of staff due to the lack of demand for housing.* ** *DLF Chairman K P Singh said the real estate sector would witness massive job losses unless steps were taken to boost housing demand by reducing the rate of interest on home loans to around 7 per cent.*
*Singh said the real estate sector supports the livelihood of many people and stalled projects meant people will lose their jobs. He added that his company may have laid off some people, but did not give any numbers. Other developers like Unitech and Parsvnath Developers are also reported to have retrenched staff in the recent past.* Singh's remarks, made on the sidelines of the India Economic Summit organised by the World Economic Forum, come at a time when there are reports of real estate firms laying off employees, as part of their cost-cutting drive. Developers have been facing liquidity crunch for over a year now. One of the reasons for this is the high risk weightage for bank loans to real estate and the ban on them from borrowing funds overseas. However, the government has asked developers to slash prices of their projects to boost demand in the sector. Singh said the lack of demand has already led to lower prices. Meanwhile, Crisil has lowered its rating on DLF's non-convertible debenture programme and long-term bank facilities to AA-/Stable from AA/Stable. The rating agency said the revision was prompted by a weakening of the company's debt protection measures and higher-than-expected gearings. The weakening was on account of higher debt funding of receivables from DLF Assets (DAL) and increased payments made for land. *The rating agency said it may revise its outlook on DLF to 'negative' if the receivables from DAL increase significantly beyond current levels. Conversely, the outlook may be revised to 'positive' if there is a significant improvement in the company's capital structure and debt protection measures.* Crisil's rating derives support from the company's policy of reducing its gearing to about 0.5 times. "These rating strengths are partially offset by the risks and cyclicality inherent to the real estate sector, DLF's aggressive plans of diversification into non-real-estate businesses, and the high levels of receivables from DAL," said Crisil. ** * * --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en -~----------~----~----~----~------~----~------~--~---
