Comments
Hindustan Construction Company Ltd (HCC) has reported a steep decline in standalone net profit to ₹11.6 crore for the second quarter of the current financial year as against ₹23.1 crore in the same period last year.
The company’s turnover stood at ₹1,031.9 crore, up from ₹972 crore in the same period a year ago. The company secured two new orders worth ₹1,574 crore in the second quarter while its total order book stood at ₹21,523 crore as of date, HCC said in a statement.
“Volatility in the banking sector had delayed the securing of limits for project working capital and CCEA receivables, which has impacted, in the short term, our ability to ramp up turnover and achieve material repayment of debt,” Praveen Sood, HCC Group CFO, said.
He said with most lenders now having sanctioned support, the company expects a pick-up in execution of its order backlog and faster receipt of arbitration award receivables and material reductions in finance cost in the coming quarters.
HCC currently has ₹4,273 crore of arbitration awards in its favour, the company added, of which HCC has procured letters from government agencies for immediate release of ₹1,930 crore of which ₹1,097 crore has already been received.
Troubled subsidiaryEarlier in September, lenders of Lavasa Corporation Ltd, one of HCC’s subsidiaries, had invoked the strategic debt restructuring (SDR) plan to resolve the stressed assets of the firm. SDR has also been invoked on Lavasa’s two wholly-owned subsidiaries — Warasgaon Assets Maintenance Ltd and Warasgaon Power Supply Ltd, HCC said.
The total debt of the company to be restructured is tentatively at about ₹3,000 crore.
The SDR process will involve lowering of debt by converting part of lenders’ loans into equity, the implementation of a fresh business plan and the induction of new investors into the project.
Due to delay in implementation of the earlier JLF approved structure, the project remained stalled for two years and an additional interest of around ₹1,200 crore was accumulated, and hence release of working capital for the project needs to be resolved on priority, the company said.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.