The Overseeing Committee of
the Reserve Bank of India (RBI) has given its approval for the Scheme for
Sustainable Structuring of Stressed Assets (S4A) for Hindustan Construction
Company, the latter said in a notification to the BSE on Sunday.
The move has made HCC the first
company to get an approval by the RBI's Overseeing Committee, it said.
HCC has a total funded debt of Rs
5,107 crore, which has been considered under the S4A scheme. The debt will be
divided into two -- sustainable and unsustainable debt.
The Part A or the sustainable debt,
according to the company, will be of Rs 2,681 or 52.50% of the total debt.
The Part B or the unsustainable
debt, will be Rs 2,426 crore or 47.50% of the total debt.
According to the notification,
"the lenders will subscribe to 24.44% fresh equity (Rs 1,008 crore
assuming Rs 40 rate) which will bring down the promoter holding from 36.07% to
27.44% The share price will be determined as per Sebi guidelines and
accordingly, the debt will go down to the extent of the conversaion amount.
"The balance portion of Part
B, will be converted into Optionally Convertible Debentures for ten years with
coupon @0.01%, 11.5% YTM," it said.
Commenting on the development, HCC
Group CEO Praveen Sood, said, "The S4A scheme will help the company bridge
the gap of 'Cashflow Timing Mismatch' between claims realisation (including its
interest) and debt servicing.
"The move comes at an
opportune time as HCC is already on recovery path with order book growth of
over 30% in last one year. We feel that it's a positive move for HCC and will
bring sustained long term solution for the company."
HCC's shares will be in focus today
on the bourses. On Friday, the company's shares had closed at Rs 34.45. In