 "Hindustan Construction Company completes debt resolution plan")
Hindustan Construction Company (HCC) has completed its debt resolution plan, duly supported by 23 banks. The resolution plan has carved out a significant portion of HCC’s debt along with commensurate assets from its balance sheet.
Under this debt resolution plan, HCC has transferred Rs 2,854 crore of lenders’ liability along with beneficial economic interest in arbitration awards and claims of Rs 6,508 crore as consideration to a Special Purpose Vehicle (SPV). This SPV will have an external investor controlling at least 51 per cent stake and HCC holding the rest.
The SPV's debt is significantly over-collateralised and is expected to be fully serviced from its own receivables, said a company statement. The underlying arbitration awards also carry interest (income), which comfortably covers any accrued interest on SPV debt.
Upon repayment of SPV liabilities, HCC will in fact have the right to receive surplus cashflows as a separate transaction, from realisation of awards and claims (expected to be of significant value). Arjun Dhawan, Vice Chairman, HCC, said, “This milestone gives us the freedom to focus on building our business with renewed confidence, by addressing a fundamental legacy issue relating to delayed arbitration payments."
One subscription. Two world-class reads.
Already subscribed? Log in
Subscribe to read the full story →*Subscribe to Business Standard digital and get complimentary access to The New York Times
Smart Quarterly
₹900
3 Months
₹300/Month
SAVE 25%
Smart Essential
₹2,700
1 Year
₹225/Month
SAVE 46%
*Complimentary New York Times access for the 2nd year will be given after 12 months
Super Saver
₹3,900
2 Years
₹162/Month
Subscribe
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Exclusive premium stories online
Over 30 premium stories daily, handpicked by our editors
Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share
Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor
Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements
Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app
SAVE 25%