HCC Expects To Complete Lavasa Debt Restructuring This Financial Year

Infrastructure developer Hindustan Construction Company Ltd. expects to complete the debt restructuring of its Lavasa real estate arm by the end of ongoing financial year.

“We expect that the entire problem of Lavasa, if everything goes well, should get resolved by the end of 2017-18. We can see a new beginning starting April,” Group Chief Financial Officer Praveen Sood told BloombergQuint in an interaction.

Lavasa's debt recast had received support of most banks in the joint lenders forum, except two large public sector banks, a senior banker had told BloombergQuint requesting anonymity. The Reserve Bank of India's decision lowering minimum consent requirement to 60 percent from 75 percent earlier helped the company.

Lavasa would require one more restructuring, which could happen as early as the next quarter, Sood said. The government's decision to grant infrastructure status to affordable housing will also help HCC revive Lavasa, he said.

HCC's standalone debt stands at Rs 4,100 crore and the company expects it to come down by nearly a fourth this year. That will be largely on the back of arbitration awards worth about Rs 1,000 crore in the next two quarters, Sood said.

HCC has received letters from government agencies for releasing Rs 1,882 crore arbitration awards. Of this, the company has already received about Rs 840 crore.

Order Book

HCC's current order book stood at Rs 20,363 crore as of June 30. In the first quarter, the company received orders worth Rs 1,012 crore, which includes Bangalore metro. It has also bid for the Mumbai Trans-Harbour Link. “We have a target of achieving orders worth Rs 5,000 crore this year,” said Sood.

Sood expects the margins to remain in the range of 12-14 percent in the upcoming quarters.

Its turnover fell nearly 5 percent to Rs 991 crore over the year-ago quarter. Net profit jumped 33 percent at Rs 14.5 crore on the back of operational efficiency.