Moneycontrol Bureau
Shares of IVRCL gained 20 percent intraday Monday as a media report indicated that the company may consider demerger of property development and EPC business.
According to a media report, the infrastructure company is likely to hold a board meeting this week to discuss possible demerger of property development and EPC business into a separate entity as it seeks to restructure its business operations for improving revenue prospects.
"The idea behind the move was that the investors would come forward to partner with new business activities in this space as the company was known for its execution capabilities in areas of property development and EPC projects," the report said quoting unnamed sources.
Additionally, the company, on November 27, has made an allotment of 2.42 crore equity shares at issue price of Rs 24.39 per share to CDR (corporate debt restructuring) lenders who have signed the master restructuring agreement. This allotment is towards conversion of funded interest term loan (FITL) into equity, for the period of July 01, 2015 to September 30, 2015.
The conversion of loan into equity shares is at a huge premium over its current market price.After conversion of FITL into equity, IDBI Bank's (one of the lenders) stake in the company increased to over 5 percent from 4.77 percent earlier.In 2014, the company's debt restructuring of more than Rs 7,000 crore was apporved by its lenders as the company was unable to pay loans due to losses. At the end of March 2015, it had debt of Rs 8,668 crore against Rs 7,679.48 crore in previous year on consolidated basis. On standalone basis, debt was at Rs 4,284 crore in FY15 against Rs 3,540 crore in FY14.For the quarter ended September 2015, the company reported a loss of Rs 305.46 crore against loss of Rs 187.55 crore in year-ago period. In fact, it has consistently been reporting losses since June quarter of 2013.
At 13:09 hours IST, the scrip of IVRCL was quoting at Rs 10.78, up 19.91 percent amid high volumes on the BSE.
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