IVRCL shines on debt restructuring plan

The creditors of debt-laden IVRCL are in talks with Essel Infraprojects to sell a controlling stake in the company’s listed unit Hindustan Dorr-Oliver (HDO). IVRCL had earlier decided to take the strategic debt restructure (SDR) route to convert its debt in the company to equity, consequently taking control of over 51 per cent stake in the company collectively.

The creditors of IVRCL are now trying to sell the company’s assets through fragmentary approach to recover their dues while looking for a new owner. IVRCL has around 55 per cent stake in HDO. HDO is a prominent engineering, procurement and construction player with a plant near Ahmedabad. The balance stake in HDO is owned by foreign institutional investors and other investors.

On the financial front, IVRCL has total debt of Rs 10,107 crore in FY16 and its cash and cash equivalent amounted to Rs 173 crore in FY16. Its net sales dropped 27.77 per cent to Rs 448 crore in Q2FY17, as compared to the same period in the previous financial year. IVRCL posted net loss of Rs 152 crore in Q2FY17, as against net loss of Rs 189 crore in Q2FY16.

The share price of IVRCL increased 9 per cent on the bourses in early trades and is trading at Rs 4.58 on intra-day basis.