At meeting held on 27 May 2021
The Board of Hindustan Construction Company at its meeting held on 27 May 2021 has approved the debt resolution plan. The salient features of the resolution plan are given below:The Company will transfer the following to Prolific Resolution, a wholly owned subsidiary of the Company:
a. Up to Rs.4,000 crore of liability;
b. Economic interest in (i) awards of up to Rs.2,749 crore and (ii) claims of up to Rs.2,136 crore, both accounted by the Company as per method of accounting regularly employed.
c. Economic interest in awards & claims of up to Rs.4,315 crore made by the Company, however, yet to be accounted.
The amount identified above will be initially novated/ assigned by the Company to Prolific Resolution. The final amount of debt along with awards and claims to be assigned will depend on when precisely the RP will close, as the debt amount to be cawed out will include all overdues till the date of implementation of RP.
i) The investor identified by lenders will acquire 51% stake in this wholly owned subsidiary for a consideration of Rs.25 crore. Additionally, the Investor will also infuse Rs.75 crore in Prolific Resolution in the form of Priority Debt. The return on this investment to the identified investor will be limited and capped to an agreed threshold.
ii) The Company's Corporate Guarantee to lenders of Prolific Resolution will be limited to 20% of the debt transferred i.e. up to a maximum upto Rs.800 crore.
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