HCC shares rally 5% as firm reduces debt exposure; all you need to know

As part of its plan with lenders, HCC had transferred an aggregate debt of ₹2,854 crore to PRPL along with ₹6,508 crore of awards and claims, while retaining a 49% equity stake in the entity.

The company had also provided a corporate guarantee for 100% of the debt owed by PRPL to its lenders. With accrued interest, the total amount of PRPL debt along with Awards and Claims is currently ₹3,935 crore and ₹6,325 crore, respectively.

“Following formal approvals from PRPL lenders, its board and relevant stakeholders, HCC's guarantee obligation has been reduced from 100% of the outstanding amount to ₹571 crore, representing 20% of the principal amount transferred,” HCC said in a regulatory filing.

The reduction is part of HCC's ongoing commitment to deleverage its balance sheet, strengthen its investment-grade rating and access capital markets for stronger future growth as it scales its operations.

Moreover, this material event has paved the way for HCC to access larger credit facilities and raise equity capital, including the recently announced Rights Issue, which is supported by HCC's promoter group. “The revised guarantee framework has been executed today in coordination with lending institutions and is in compliance with applicable regulatory, legal, and governance requirements,” the company said.

Following the development, HCC shares rallied on Thursday. At close PM, HCC shares settled at ₹18.785 apiece on the National Stock Exchange, gaining 3.46%.

The company has a total market capitalisation of ₹4,908.88 crore, according to NSE data.

About HCC

Hindustan Construction Company Ltd is a major engineering and construction company with expertise in the infrastructure segment. The company is primarily engaged in high-value projects for transportation, power, marine, oil and gas pipeline construction, irrigation, water supply, utilities and urban infrastructure. Founded by Seth Walchand Hirachand in 1926, it is headquartered in Mumbai.

The company also undertakes various construction and engineering works for hydroelectric power projects and nuclear power projects. HCC has completed several projects pertaining to the construction of dams, barrages, tunnels and powerhouses.