Hindustan Construction Company Ltd (HCC) said on Tuesday it would sell rights to a portfolio of awards and claims on projects tied up in litigation to a consortium of investors led by BlackRock Inc for Rs 1,750 crore.
Hindustan Construction Company Ltd (HCC) said on Tuesday it would sell rights to a portfolio of awards and claims on projects tied up in litigation to a consortium of investors led by BlackRock Inc for Rs 1,750 crore.
The deal is likely a relief for the engineering and construction company, which has seen its financials suffer as a result of stalled projects and payments held back by the government against claims by contractors.
A part of the consideration it receives will be used to prepay debts worth Rs 1,250 crore, and the deal will result in a partial write-down of the company's net worth as on March 31, HCC said in a statement.
The value of the awards and claims is pegged at Rs 2,000 crore, it added.
HCC will set up a special purpose vehicle to carry out the transaction, which will issue non-convertible debentures to the investors.
The company had gross debt of Rs 3,490 crore as of Dec. 31, 2018, and its order backlog stood at Rs 18,213 crore, HCC said in its latest quarterly report.
As on March 31, 2018, the company had won arbitration claims amounting to Rs 4,823 crore, of which it had collected Rs 1,416 crore, according to its annual report for the year ended March 2018.
HCC shares jumped as much as 10.8 per cent after Tuesday's announcement. They settled 8 per cent higher in Mumbai market that was up 1.14 per cent.
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