Mumbai: Eight Capital Group and Centrum Capital Ltd are in a race to pick up a majority stake in Hindustan Dorr-Oliver Ltd (HDO), which is currently facing corporate insolvency proceedings, two people familiar with the development said.

Debt-laden IVRCL Ltd, in which banks own a majority stake post conversion of a part of their debt into equity via strategic debt restructuring (SDR), has a 55% stake in HDO. 

“While Eight Capital has already submitted its expression of interest (EoI), Centrum has been working on it and is likely to submit the same soon," one of the two people cited above said. 

HDO, a leading engineering, procurement, construction (EPC) player in the past, has been under financial distress and has seen its net worth erode. The National Company Law Tribunal (NCLT) Mumbai, after being approached by Bank of India Ltd, had ordered insolvency proceedings against the firm and appointed an interim resolution professional (IRP) earlier this April. 

In the quarter ended September, HDO had reported a net loss of Rs85.3 crore on revenue of just Rs11.4 crore. It owed lenders over Rs1,400 crore as of March 2017.

“Eight Capital has roped in Pennar Industries Ltd as an operating partner, and its EoI includes converting HDO’s debt into debentures with a low coupon and transferring most of it to its books. It has also committed to infusing fresh equity into the company and turning it around in partnership with Pennar," the second person mentioned above said, adding that Centrum’s bid is likely to be in partnership with a strategic investor. 

A spokesperson for Centrum, however, said the firm was not planning to submit a bid for HDO. “We are an advisor to the company and are assisting them in finding suitable investors," he said. 

Emails sent to Eight Capital, Pennar Industries and the IRP Amit Gupta remained unanswered till the time of going to press.

On Monday, shares of Hindustan Dorr-Oliver rose 4.08%, or Rs0.29, to Rs7.39 apiece on the BSE while the benchmark Sensex gained 0.62%, or 205.49 points, to end the day at 33,455.79.

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