Hindustan Construction Company (HCC) shares shares hit upper circuit on Thursday after the company announced that the Cabinet decision that requires government agencies to pay 75 per cent of arbitral awards will result in HCC’s debt being reduced by half.
Hindustan Construction Company (HCC) shares hit upper circuit on Thursday after the company announced that the Cabinet decision that requires government agencies to pay 75 per cent of arbitral awards will result in HCC’s debt being reduced by half. HCC has arbitration awards for over Rs 3,200 crore and with the Wednesday’s decision, the company will get 75 per cent of this amount immediately. Similarly, claims worth around Rs 5,000 crore are in arbitration process. In a BSE filing, the company said, “The decision will further help HCC to secure these awards within a duration of 12 months.
At 9.40 am, shares of HCC were trading 12 per cent up at Rs 30.80. The scrip opened at Rs 29.90 and has touched a high and low of Rs 32.60 and Rs 29.20, respectively, in trade so far. Later, the scrip ended 19.91 per cent up at Rs 32.75.
“We are pleased with the cabinet’s decision on payment of arbitration awards to infrastructure companies. HCC will immediately be able to reduce its debt by almost half as a result and withing 12 to 24 months, materially reduces it even further. With this HCC will be able to participate in country’s infrastructure development in a much bigger way,” Ajit Gulabchand, chairman and managing director, HCC said in a release.
The company has a standalone debt of Rs 4,900 crore. For the quarter ended June 30, 2016, the company reported a net profit of Rs 10.88 crore, up 17.49 per cent, against Rs 9.26 crore in the corresponding quarter a year ago.