HCC firms up as Lavasa lenders invoke debt restructuring

Hindustan Construction Company rose 3.51% to Rs 33.90 at 9:51 IST on BSE after the company said that lenders had decided to invoke the strategic debt restructuring scheme for its Lavasa township project.

The announcement was made after market hours yesterday, 28 September 2017.

Meanwhile, the S&P BSE Sensex was up 122.04 points, or 0.39% to 31,404.52.

On the BSE, 7.39 lakh shares were traded in the counter so far, compared with average daily volumes of 16.31 lakh shares in the past one quarter. The stock had hit a high of Rs 35.15 and a low of Rs 33.90 so far during the day.

Hindustan Construction Company (HCC) said Lavasa lenders will invoke strategic debt restructuring (SDR). The SDR process will involve lowering of debt burden by converting a part of lenders loans into equity, along with the implementation of the proposed business plan and infusion of fresh capital by a financial or strategic investor to implement the project and help protect the value of the asset within the timelines prescribed by RBI in its notification. The lenders took note of the fact that due to delay in implementation of earlier joint lenders forum approved structure, the project remained stalled for 2 years and an additional interest of around Rs 1200 crore was accumulated, and hence release of working capital for the project needs to be resolved on priority.

Lavasa Corporation, which is developing a hill city 'Lavasa' near Pune, reportedly has an outstanding debt of Rs 5100 crore.

Net profit of HCC rose 33.5% to Rs 14.52 crore on 5.3% decline in net sales to Rs 930.66 crore in Q1 June 2017 over Q1 June 2016.

HCC serves the infrastructure sectors of transportation, power and water. HCC is also developing Lavasa City, a planned hill city and one of India's largest urban development and management initiatives.

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