The creditors of Hindustan Construction Company (HCC) will meet tomorrow to review the RBI-mandated overseeing committee's (OC) approval of scheme for sustainable structuring of stressed assets (S4A) of the construction major.
Last week, the overseeing committee had met and gave its nod for implementation of the S4A scheme to restructure Rs 5,107 crore of HCC's debt.
Around 20 lenders led by ICICI Bank have an exposure of over Rs 5,100 crore to the city-based construction major which had turned dud loans some years back.
"The joint lending forum (JLF) will meet tomorrow. It will review the OC's decision and will decide the way forward.
It will also fix the time line for implementation of the S4A scheme," a banker said.
HCC is the first company to secure approval by OC under the RBI's S4A scheme which was notified this June.
Under the scheme, HCC's Rs 5,107 crore of debt is divided into two parts - sustainable debt of Rs 2,681 crore (52.50 per cent) and unsustainable debt of Rs 2,426 crore (47.50 per cent).
The lenders will subscribe to 24.44 per cent fresh equity which will bring down promoter holding from 36.07 per cent to 27.44 per cent.
The share price will be determined as per Sebi guidelines.
The portion of unsustainable debt will be converted into optionally convertible debentures for 10 years with coupon of 0.01 per cent, 11.5 per cent yield-to-maturity (YTM).
The S4A scheme envisages the determination of a sustainable debt level for stressed borrowers, and bifurcation of outstanding debt into sustainable debt and equity/ quasi-equity instruments, which are expected to provide upside to lenders when the borrower turns around.
The scheme covers projects that have started commercial operations and have outstanding loan of over Rs 500 crore.
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