With debt rejig on cards, Gammon looks to improve liquidity

Moneycontrol Bureau

Gammon India is likely to begin talks to restructure its debt through the corporate debt restructuring process, said the company in a statement on Wednesday evening.

The company has around Rs 3,500 crore debt with high interest cost due to investments in real estate projects as well as in its power business internationally.

In a recent interview to CNBC-TV18, the company's chief financial officer, Girish Bhat had said that the company is facing very tight liquidity position arising out of deceleration in the economy.

In a nutshell, due to big-ticket projects being hard to come by along with a general slowdown, companies engineering companies are finding it difficult to maintain a healthy order inflow.

Due to an overall tight business environment, Gammon had reported net loss of Rs 261.64 crore for the December quarter as against Rs 1.02 crore profit year-on-year. Its sales were marginally up to Rs 1216.47 crore as against Rs 1184.69 crore.

However, the company is hopeful of being EBITDA positive in FY13 on improved business scenario. Read This:  Gammon India eyes 5% EBITDA margin for Q4