New Delhi: With its cash flow under stress, engineering and construction firm HCC on Friday said its board has approved corporate debt restructuring proposal.
“The board of directors of the company at its meeting... has decided to approach bankers through CDR (Corporate Debt Restructuring) process for re-alignment of the company’s debt,” HCC said in a filing to the Bombay Stock Exchange.
“As a consequence of certain unexpected developments, mainly delays in decision making by the company’s major clients and delays in settlement of claims, the expected cash flow has not materialised,” it added.
Higher interest outgo and cost overruns had led to HCC posting a net loss of Rs130 crore for the quarter ended 31 December.
The city-based firm had a net profit of Rs8 crore during the 2011 December quarter.
Though turnover of the company improved by Rs112 crore vis-a-vis the September quarter to Rs949 crore in the reporting period, it was down by Rs78 crore vis-a-vis the October-December quarter last fiscal.
“The revenue growth was lower due to slow order booking during the last four quarters, execution bottlenecks, rising interest costs and payment delays by clients,” HCC chairman and managing director Ajit Gulabchand had said.
During the December quarter of the current fiscal, HCC’s interest outgo was Rs30 crore higher at Rs104 crore. It also suffered a Rs64.87 crore loss on account of cost overruns as a result of “substantial delays” in approval of claims, an increase in estimated costs and delays in execution.
Shares of HCC rose 4.32% to Rs27.75 in late afternoon trading on the BSE.
