The Mumbai-based company, which received lenders' approval last year to recast term loans of Rs 3,200 crore, now plans to sell stake in some real estate andinfrastructure assets to pare debt. The company that has built several iconic infrastructure projects such as the Bandra-Worli Sea Link in Mumbai has been under duress due to the slowdown in business and burden of high interest rates.
"We have identified some investments that we want to exit. These are not part of our core business. So, the sale of these assets would help us streamline business and raise Rs 500 crore to Rs 1,000 crore," HCC's group chief financial officer Praveen Sood told ET.
The company has put on the block land parcels in Mumbai and Pune. Besides, it is looking at selling stake in 247 Park, an office property in Mumbai's Vikhroli area, in which it holds 26% equity stake. "Transport business would be key to our growth going ahead. But we hope to sell stake in some of our existing BOT (build-operatetransfer) projects in 2013-14," Sood said.
HCC is considering selling further stake in its infrastructure subsidiary, which owns infrastructure development projects totalling Rs 7,000 crore, including seven National Highways Authority of India's concession projects. The group had raised Rs 240 crore by selling 14.5% in this arm to Singapore-based Xander Group in September 2011.
After months of negotiations with a consortium of 27 banks, the Ajit Gulabchand-led company got approval to restructure its term loans and a moratorium on the principal for two years. The debt recast, under the corporate debt restructuring route, has provided a breather but slowdown in business continues to be a worry since the company has accumulated loans of over Rs 4,600 crore. On Friday, HCC reported a standalone loss for the second consecutive year in 2012-13 at Rs 138 crore. Its revenue declined 4% from the year-ago period to Rs 3,832 as project delays continued.
Analysts said that the debt recast would provide some relief to HCC as it has lowered the interest rate but added that debt reduction, meeting equity requirement for road projects and delay in monetisation of Lavasa project would continue to pose challenges.
Highly leveraged infrastructure companies such as Lanco Infratech, GMR Infrastructure and GVK Power and Infrastructure, among others, are also looking at divesting stake in projects and subsidiaries, besides selling assets, to raise funds to pay off debt.
Issues such as inordinate delays in the sector due to lack of clearances, land acquisition problems and lower than expected returns upon completion have paralysed the sector. Investors continue to be jittery and wait on the sidelines before committing investment.