Hindustan Construction Company Ltd (HCC) shares tumbled over two percent in the morning session on December 23, after the construction player announced it divested its stake in Steiner AG.
"In line with HCC's strategy to focus on in its core EPC operations, HCC's stake in Steiner AG (SAG) (held via its wholly owned subsidiaries) has been sold to Uniresolv SA, an affiliate of m3 lmmobilier Holding SA (m3), a prominent player in Geneva's real estate and finance sectors," said the company in a filing with the exchanges.
At 11.40 am, shares of the firm were quoting Rs 42.46 on the NSE, lower by 2.5 percent compared to the previous session.
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As a result, a SAG subsidiary, Steiner Development AG (SDAG) can achieve a fresh start as a direct subsidiary of m3 lmmobilier, with aspirations to ready for a Swiss IPO, while also helping HCC realise earnout liquidity of up to Rs 205 crore from SDAG's future success, the firm added.
"At closing, HCC will also retain ownership of two SAG subsidiaries, Steiner Eagle AG (SEAG) and Steiner India Ltd (SIL), which hold Rs 1,174 crore of contractual receivables and claims and Rs 43 crore of Indian land assets, the imbedded asset value of which the entities expect to realise in 5 years. m3 will work closely with HCC to realise the assets in SEAG, of which HCC will share up to Rs 205 crore with m3," the release added.
Additionally, HCC announced it completed a claims settlement with a major client for Rs 180 crore, resulting in the reduction of client advances amounting to around Rs 130 crore. This implies a reduction of annual financing charges of Rs. 15 crore, with the balance Rs 50 crore being received as cash consideration, thereby boosting liquidity.
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