Patel Engineering shares soared nearly 13 per cent on Thursday after the company informed bourses that the Cabinet decision that requires government agencies to pay 75 per cent of the arbitral awards is expected to reduce the company’s debt by more than 50 per cent. The company has won arbitration award in excess of Rs 2,500 crore. In a BSE filing, the company said, “With the recent Cabinet decision, the company will get 75 per cent of this amount immediately which will be utilised to retire debt.”
Shares of the company closed 12.92 per cent up at Rs 53.75. The scrip opened the day at Rs 47.60 and touched a high and low of Rs 57.10 and Rs 47.35, respectively, in trade so far. Sensex settled 28.69 points down at 28,423.48.
As on March 31, 2016, the company company had standalone debt of around Rs 4,535 crore. Claims around Rs 5,000 crore are in the arbitration process are are expected to be monetised within next 12-18 months based on the Cabinet decision.
For the financial year ended March 2016, Patel Engineering reported a consolidated net loss of Rs 18.68 crore against net profit of Rs 11.89 crore last year. Net sales of the company jumped by 6.01 per cent year-on-year to Rs 2543.49 crore for the year ended March 31, 2016.
Patel Engineering is a construction company specialising in hydro-power generation, irrigation and urban infrastructure projects.