Mumbai based Hindustan Construction Company is in talks with lenders to refinance its massive Rs 4347 crore debt according to two sources familiar with the details. The company has been battling with high debt due to slowdown in order inflow and high interest rate.
‘In the present atmosphere, factors such as slow decision making combined with delays in payment by the government and high interest rates have impacted growth. HCC is in discussion with lenders to create additional cash flows to support our business growth plans’ said a senior company official
Sources say that one of the option been considered is extending the payment cycle to a ten period as that would help in bringing down the annual payment amount for the company. Though the source added that the modalities are still been worked out.
The lenders as part of the exercise will replace the existing debt with fresh debt but the interest rate is likely to remain the same. ICICI is the biggest lender to Hindustan Construction Company.
SBI Caps is leading the talks for the refinancing arrangements.
The company is also looking at selling partial stake in some of its real estate & infrastructure businesses to bring down its mounting debt.
Hindustan Construction Company has been faced with a double whammy over the last one year, as an economic slowdown has hurt order inflow and the environment ministry shut down construction at unit Lavasa Corp.'s hill-town project near Mumbai. The ministry lifted its shut-down notice after a year in November, and set several conditions for the project to go ahead.
The company has said in the past that the delay in outstanding payments from state-run National Highways Authority of India and hydro-power generation company NHPC Ltd has also had an impact on its operations.
It had an outstanding orderbook of Rs16240 crore as of Dec. 31, 2011
‘In the present atmosphere, factors such as slow decision making combined with delays in payment by the government and high interest rates have impacted growth. HCC is in discussion with lenders to create additional cash flows to support our business growth plans’ said a senior company official
Sources say that one of the option been considered is extending the payment cycle to a ten period as that would help in bringing down the annual payment amount for the company. Though the source added that the modalities are still been worked out.
The lenders as part of the exercise will replace the existing debt with fresh debt but the interest rate is likely to remain the same. ICICI is the biggest lender to Hindustan Construction Company.
SBI Caps is leading the talks for the refinancing arrangements.
The company is also looking at selling partial stake in some of its real estate & infrastructure businesses to bring down its mounting debt.
Hindustan Construction Company has been faced with a double whammy over the last one year, as an economic slowdown has hurt order inflow and the environment ministry shut down construction at unit Lavasa Corp.'s hill-town project near Mumbai. The ministry lifted its shut-down notice after a year in November, and set several conditions for the project to go ahead.
The company has said in the past that the delay in outstanding payments from state-run National Highways Authority of India and hydro-power generation company NHPC Ltd has also had an impact on its operations.
It had an outstanding orderbook of Rs16240 crore as of Dec. 31, 2011
(Catch all the Business News, Breaking News, Budget 2024 Events and Latest News Updates on The Economic Times.)
Subscribe to The Economic Times Prime and read the ET ePaper online.
Read More News on
(Catch all the Business News, Breaking News, Budget 2024 Events and Latest News Updates on The Economic Times.)
Subscribe to The Economic Times Prime and read the ET ePaper online.
Get Unlimited Access to The Economic Times
