HCC advances on receiving approval for S4A scheme

Hindustan Construction Company (HCC) is currently trading at Rs. 41.60, up by 0.60 points or 1.46% from its previous closing of Rs. 41.00 on the BSE.

The scrip opened at Rs. 41.70 and has touched a high and low of Rs. 42.65 and Rs. 39.85 respectively. So far 68,68,000 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 1 has touched a 52 week high of Rs. 42.65 on 02-Dec-2016 and a 52 week low of Rs. 16.60 on 12-Feb-2016.

Last one week high and low of the scrip stood at Rs. 42.65 and Rs. 33.35 respectively. The current market cap of the company is Rs. 3,225.00 crore.

The promoters holding in the company stood at 36.07%, while Institutions and Non-Institutions held 24.93% and 39.00% respectively.

HCC has decided to issue equity shares as well as optionally convertible debentures (OCDs) to lenders under RBI's S4A scheme. The Board of Directors, in the meeting held on December 02, has approved issuance of Rs 25.19 crore equity shares of the company, of face value Rs 1 each, representing 24.44% of the expanded share capital of the company and such Optionally Convertible Debentures (OCDs) of face value Rs 1000 each not exceeding Rs 2,000 crore on Preferential Basis, to the Lenders.

The Board decision to issue the aforesaid securities is pursuant to implementation of the HCC S4A Scheme, in accordance with Chapter VII of SEBI (ICDR) Regulations, 2009 and other applicable provisions of the Companies Act, 1956, subject to shareholders' approval. The Board also decided to convene an Extraordinary General Meeting of the company on January 5, 2017 for seeking shareholders' approval for the aforesaid matter. HCC is the first company to get its debt restructured under the S4A scheme.

The Board has also approved Rs 2,100 crore Bank Guarantee (BG) limits for release of arbitral award amount as per Cabinet Committee on Economic Affairs (CCEA) approval for revival of the construction sector directing government agencies to pay ‘75% of the arbitral award amount against margin free bank guarantee’. Recently, the company has received communication from government agencies to submit BG and Escrow Account details for release of 75% of Arbitral awards. HCC has arbitration awards for Rs 3,427 crore as of September 30, 2016. Further claims worth around Rs 4,173 crore are in arbitration process.

HCC is a leader in engineering and construction space. The company has established a vast presence and gained recognition in the sectors of Hydro Power, Water Solutions, Transportation and Nuclear Power.