HCC redeems FCCBs worth $133 mn

Hindustan Construction Company today said it has paid $133.03 million to bond holders towards redemption of the entire outstanding Foreign Currency Convertible Bonds (FCCBs).

The total amount of $133.03 million comprises of the nominal value of the bonds of $96.60 million and redemption premium of $36.43 million, the company said in a statement, adding that redemption price was 137.71% of the principal amount.

The statement further said that the repayment has been funded out of the internal resources of the company.

HCC Chairman Ajit Gulabchand had earlier said that the company has a portfolio of about Rs 550 crore in FCCBs and it is ready to pay back the investors, in case the FCCBs do not get converted into equity.

"In the event, if the FCCBs do not get converted, we will repay them (investors) and we are fully prepared to repay them with sufficient internal accruals and cash available with us," Gulabchand had said last year.

To access cheap foreign currency debt, many midcap companies like HCC had issued FCCBs in FY06 and provided their holders the option to convert the bonds into equity within the pre-determined period and price.

FCCBs are zero-coupon bonds and companies have to pay the redemption amount, along with the compounded interest. Under accounting principles, repayment to FCCB holders will entail the company charging the interest paid to the profit and loss account, thereby impacting profits in that fiscal to that extent.

Scrips of the company were trading in green today at 3 pm hours on the Bombay Stock Exchange and were up by 2.06% at Rs 37.10 apiece.