HCC slips back into red

about 13 days ago
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HCC had hit the 20% UC yesterday at Rs.10.06 and today, currently it is down in the red. It opened a tad higher at Rs.10.60, even went up to Rs.10.89 but from there it slipped into the red, going down to 9.40 levels.

Yesterday, the market was thrilled to bits that three solid offers had come in to takeover HCC’s beleaguered Lavasa – Haldiram Snacks, Pune-based builder, Aniruddha Deshpande, and UV Asset Reconstruction Company (UVARC).

Haldiram is said to have offered to take over 100% of Lavasa by birning in Rs.2046 crore through a consortium of Haldiram Snacks, Pioneer Facor IT Infradevelopers, and Sansar Property LLP.

Deshpande, who was one of the original promoters of Lavasa had sold out his stake to HCC and now he wants in again but his offer was the lowest at Rs.250 crore, with no real funding pattern in place.

At end of FY19, Lavasa owned 10,514 acres of land including 455 acres of land which is on lease. This is what interests the buyers despite the pile of debt.

The company was to have announced the “winner” yesterday but that did not happen; so the suspense continues.

On the other hand, it announced its earnings for Q2FY20, posting net loss of Rs.1525 crore v/s net profit of Rs.11 crore (YoY) as it had written off its entire investments in Lavasa project, which was earlier this year taken to NCLT by the operational creditors.

HCC has written of its exposure to Lavasa Corporation Ltd (LCL) and HCC Real Estate Ltd, a wholly-owned subsidiary which holds 68.7% in LCL, resulting in an exceptional expense of  Rs.2,011 crore.

The company has said, “A substantial majority of these obligations, amounting to Rs.943 crore, has been restructured for Rs.514 crore at benign, non-cash interest rates, repayable at the end of March 2023, thereby resulting in immediate savings to the company.

It added, “The sum total impact of all write-offs in the quarter, adjusted for tax, is ?1,531 crore. Having comprehensively accounted for its entire exposure to Lavasa, HCC expects no further impact on account of its erstwhile subsidiary.”

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