HCC's lenders to restructure its loans under RBI S4A scheme

Infrastructure firm Hindustan Construction Company (HCC) today said its lenders have agreed to restructure its loans under RBI's recent S4A scheme.
"The joint lenders' forum meeting of HCC held on July 12, 2016 has passed to resolve the account under the recent RBI guidelines 'Scheme for Sustainable Structuring of Stressed Assets (S4A)'," the company said in a BSE filing.
The company said it will help it bridge the gap of 'Cashflow Timing Mismatch' between claims realisation (including its interest) and debt servicing.
It further said: "Under S4A scheme, the debt of the company will be bifurcated into two parts - sustainable debt, which cannot be less than 50 per cent of existing debt and will have to be serviced over the same terms as that of existing facilities.

The other unsustainable part of the loan can either be converted into equity/redeemable optionally convertible preference share\optionally convertible debentures, with clearly spelt out terms".
HCC added that lenders get 90 days from 'Reference Date' (July 12) to formulate the resolution plan and implement the same, along with necessary internal approvals.

HCC, which has a debt pile of over Rs 12,000 crore, in its annual report for the previous fiscal, said it is finding it difficult to get buyers for its asset monetisation plan.
The company is keen on monetising its non-core assets to generate cash and repay debt.
In fiscal 2012-13, the company had availed of a corporate debt restructuring (CDR) package with a consortium of its bankers.

HCC had reported a net profit of Rs 84.97 crore in 2015-16, while its turnover stood at Rs 4,191 crore. The order book grew 25.4 per cent at Rs 18,123 crore, excluding L1 contracts worth Rs 3,701 crore.