MUMBAI: Hindustan Construction Company is chalking out plans to raise Rs 1,500-2,000 crore to repay debt and get the Mumbai-based construction and engineering company out of the corporate debt restructuring cell ahead of schedule.
"I have to get out of CDR. I am trying to do it faster than the 10 years given by the banks. I will do whatever is required to reduce the interest burden," Ajit Gulabchand, chairman and managing director of HCC told ET in an interview.
"I have to get out of CDR. I am trying to do it faster than the 10 years given by the banks. I will do whatever is required to reduce the interest burden," Ajit Gulabchand, chairman and managing director of HCC told ET in an interview.
"If I payback. Rs 1,500 crore, my debt, my profit and ratings improve and I become a normal company. I want to make sure that we put our finances in order so that when Prime Minister Narendra Modi and his government reset the economy and relaunch India on a new growth path, we would be fit to participate in the infrastructure growth," he said.
HCC, which has to its credit construction of some of India's major nuclear power plants, hydro power plants and Mumbai's Sea Link project, has had it rough the last two years.
While it suffered like most other infrastructure companies due to a slowdown in the economy, delays in projects, and slow decision making of government bodies, its challenges were aggravated with its most ambitious project—Lavasa hill city near Pune—had a run-in with the ministry of environment.
Faced with accumulating losses and huge debt, HCC had to resort to restructuring term debt of Rs 3,200 crore in 2012. After months of negotiations with a consortium of 27 banks, the company was inducted into the CDR cell which allowed a two-year moratorium on the principal and subsequently repayment over the next eight years.
The worst may be over for HCC. It has returned to profits, though muted due to high interest cost, as project execution has picked up.
HCC, which has to its credit construction of some of India's major nuclear power plants, hydro power plants and Mumbai's Sea Link project, has had it rough the last two years.
While it suffered like most other infrastructure companies due to a slowdown in the economy, delays in projects, and slow decision making of government bodies, its challenges were aggravated with its most ambitious project—Lavasa hill city near Pune—had a run-in with the ministry of environment.
Faced with accumulating losses and huge debt, HCC had to resort to restructuring term debt of Rs 3,200 crore in 2012. After months of negotiations with a consortium of 27 banks, the company was inducted into the CDR cell which allowed a two-year moratorium on the principal and subsequently repayment over the next eight years.
The worst may be over for HCC. It has returned to profits, though muted due to high interest cost, as project execution has picked up.
As a first step to get HCC out of the woods Gulabchand has sought capital market regulator Sebi's approval for a Rs 750-crore initial public offer for Lavasa.
"I am going to do nothing new. Lavasa will be the key driver for us. Where we were stalled, we want to reset and put out house in order," Gulabchand said. Next up, the company plans to raise Rs 1,500-2,000 crore at the parent company level to repay debt.
This will be done through sale of shares, monetization of funds and recovery of dues with government agencies. HCC has Rs 8,000 crore of claims with different government bodies, of which Rs 1,500 crore has been awarded to it after arbitration but is being challenged in court.
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