Hindustan Construction Company’s (HCC) lenders have initiated a carve-out of about Rs 2,100 crore of debt to a third-party-controlled SPV along with certain Arbitration Awards and Claims in a move that will significantly deleverage the Company and address its asset-liability mismatch.
The debt - along with receivables comprising approximately an Award cover of 1.0x and Claims under Arbitration of 1.5x - will move to an SPV controlled by a new investor. The tenure of the debt at the SPV will be up to 10 years and repayments from the proceeds of the Awards will yield an IRR higher than current yields offered by HCC.
The debt/asset carve-out, which will be in the nature of a slump sale, is subject to lenders’ final approvals. Lenders aim to seek their internal approvals and target to close the transaction prior to March 31, 2020. The Company will also seek the requisite corporate approvals for the transaction.
HCC is a leader in engineering and construction space. The company has established a vast presence and gained recognition in the sectors of Hydro Power, Water Solutions, Transportation and Nuclear Power.
Company Name | CMP |
---|---|
Larsen & Toubro | 3519.25 |
Rail Vikas Nigam | 258.65 |
KEC International | 693.50 |
Kalpataru Projects | 1200.45 |
NCC | 243.50 |
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