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ICICI-led lenders’ group puts Gammon on the block

Infra News - Published on Mon, 12 Feb 2018

Image Source: ET
ET reported that in a bid to recover dues, Joint Forum of Lenders (JFL) led by ICICI Bank, has put debt-laden construction and engineering company Gammon India on the block, said two persons with direct knowledge of the development. Total 12 lenders including ICICI Bank, Canara Bank, Punjab National Bank, Syndicate Bank, Bank of Baroda, Allahabad Bank, IDBI Bank, DBS Bank, UCO Bank and Oriental Bank of Commerce have already converted portion of their debt into equity under the Reserve Bank of India’s strategic debt restructuring (SDR) mechanism, and now the JLF owns 63.8% stake in the company.

One of the persons mentioned above “Lenders, as per the restructuring plan, have already hived off and monetized Gammon India’s Transmission & Development business and EPC vertical. The lenders are now looking to sell the residual part of the company.”

After the said carving out of T&D and part of Engineering, Procurement, and Construction (EPC) business, the company still houses its real estate business and 180-acre land parcel in Dombivali suburb of Mumbai, its headquarter Gammon House in Prabhadevi, a township project on Mumbai’s outskirts and land in Bhopal.

The lenders’ group has appointed professional services firm EY to undertake the mandate of finding a prospective buyer and conclude the transaction at the earliest.

Of the nearly 64% stake with these banks, Canara Bank with 14.7% equity stake is the largest shareholder, while ICICI Bank holds 10.7% stake in the company. Punjab National Bank, Bank of Baroda and Syndicate Bank own nearly 6% stake each. Most of the lenders are public sector banks with the exception of ICICI Bank and DBS Bank.

According to Gammon India’s executive director RA Bhansali, total debt extended by these 12 banks to Gammon was around Rs 13,500 crore. About 75% of SDR has been completed and the remaining assets are essentially investments in various companies, he added.

Promoter Abhijit Rajan and associate companies now own around 11.54% equity stake and nearly 93% of this has already been pledged. According to the latest available data based on Gammon’s regulatory filing on Tuesday, the company’s consolidated long-term debt and current liabilities stood at around Rs 11,964 crore as on March 2017.

However, according to Bhansali, the consolidated debts and liabilities combined are around INR 4,000 crore as of now.

Source :

Posted By : Nanda Koijam on Mon, 12 Feb 2018
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