HCC’s dues of Rs 5,000 cr stuck in litigation
Hindustan Construction Company’s dues of Rs. 5, 000 crore, mainly with various government agencies, continue to be stuck in litigation, although a year has passed.
Praveen Sood, group chief financial officer, HCC,told sources ,out of the dues of R5,000 crore, R1,000 crore is being battled out in courts for settlement while the remaining R4,000 crore is at different stages of arbitration.
HCC chairman and managing director Ajit Gulabchand had stated in last year’s annual general meeting (AGM ),that nearly R5,000 crore remains unpaid to the debt-laden infrastructure company from different government authorities.From which R2,500 crore was associated to various highway construction projects,and the remaining in the hydro-electric sector.
Sood added, “We earlier had R5, 000 crore of claims, the majority of which were in arbitration. Now, at least R1, 000 crore of claims have moved from the arbitration stage to courts. The remaining (R4, 000 crore) is also moving to the court.”
NHAI’s Projects
The two National Highway Authority of India projects, are related to R1,000 crore worth of claims, amongst which one National Thermal Power Corporation project, and another related to the Ennore Port. As they are sub judice therefore the company did not provide specific details for each claim.
Sood further added the government’s decision-making ability continues to be delayed and authorities are abstaining from taking any call on a matter that is disturbing infrastructure businesses across India.
Because of slow order inflows, execution bottlenecks, rising interest cost and delays in payments by clients, in the last two years, HCC’s revenue and profits have suffered. From R18,127 crore in 2010-11, at the end of 2012-2013 the company’s order book had reduced nearly 18% to R14,935 crore.
HCC went in for corporate debt restructuring, in 2012. By a consortium of 27 lenders, loans to the tune of R3, 300 crore were restructured.
As part of the restructuring package, the promoters were asked to bring in R300 crore which included adjusting the debt in terms of the payback period, providing a concessional rate of interest and advancing further working capital.
Sood informed that the company is meeting its CDR obligations. “The moratorium got over in January 2014 and we have begun payments as per the schedule,” he added.
With the order inflow situation improving and the company returning to the black, HCC could be turning the corner on the operational front. In the third quarter ended December 31, 2013 It posted a stand-alone net profit of R5.4 crore, against a net loss of R38.5 crore in the same period last year. It showed profits in the previous two quarters as well. HCC’s order backlog stands at R13, 388 crore by the end of December 2013.
Source: The Financial Express
annual general meeting, CDR obligations, corporate debt restructuring, Courts, Government agencies, HCC chairman and managing director Ajit Gulabchand, Highway construction projects, Hindustan Construction Companies, Hydro-electric sector, India, Infrastructure businesses, National Highway Authority of India, National Thermal Power Corporation project, Praveen Sood, promoters, The Ennore Port
