Facing liquidity issues, Gayatri Projs reports loan defaults of Rs 19.65 cr

Hyderabad-based infrastructure company Gayatri Projects Limited has reported loan defaults of up to Rs 19.65 crore in a stock exchange filing as required under Sebi's November, 2019, directive with regard to loan defaults of listed entities.

The company's shares were down 4.84 per cent or Rs 1 lower at Rs 19.65 on Bombay Stock Exchange on Tuesday. The total outstandings of the company stood at Rs 1,816.84 crore while the total financial indebtedness of the company was Rs 3,232 crore, which includes both short-term and long-term debt along with Rs 1,405.23 crore in advances from contractees, according to the filing.

The reported loan defaults comprise of smaller amounts ranging from Rs 4 crore to as low as Rs 12 lakh due for repayment to banks under 13 sanctioned loans in the past couple of weeks, an indication of ongoing liquidity being issues faced by the company.

Gayatri Projects has witnessed a subdued performance in the first 9 months of the current financial year mostly because of delayed execution of EPC road and irrigation contracts. There was a 2 per cent decline in EBITDA margin and a 17 per cent decline in net profit at Rs 116.4 crore on a revenue of Rs 2,511.7 crore during the nine-month period ending December, 2019, due to factors including inflation in fixed operating cost plus significant a hit due to expected credit loss provision, according to the company.

The company raised Rs 410 crore in December, 2019, via sale of a 5.95 per cent stake in Sembcorp Energy India. Of this, Rs 210 crore was used towards repayment of long-term debt and balance  amount was utilised for meeting the working capital requirements among other things. The company's senior management recently said that it was hoping to improve the liquidity situation by fast tracking of claims' settlement and monetisation of the arbitration awards in the next couple of months. The company expects to monetise 7 specific arbitration awards for nearly Rs 400 crore.

"We expect cash flows from these awards over the next one to two months and the same will go towards repayment the respective bank debts. We are confident that through these expected cash flows the long-term debt of the company will be reduced to zero," Gayatri Projects' managing director T Sandeep Reddy told analysts in a recent earnings call.

About 70 per cent of the company's Rs 14,000-crore order book comprises of road contracts. The company said the execution delays occurred mainly due to the extended monsoons.