New Delhi( PTI): Construction and engineering major Gammon India today said one of its lenders, DBS Bank, has asked the firm to convert the outstanding loan and interest into equity shares.
Gammon India’s Board of Directors at its meeting held on Wednesday took note of letter (dated March 8, 2016) received from DBS Bank, one of the lenders to the company, the firm said in a regulatory filing.
The letter seeks an amendment to terms of the ‘Facility Agreement’ entered into with DBS Bank “to include an option to the bank to convert their outstanding loan and interest thereon into equity shares of the company, in the event of any default by the borrower in repayment of financial facilities due to DBS Bank,” the filing added.
Gammon India will approach the shareholders for their approval, it said.
In a separate filing, Gammon India said it is “evaluating proposals from potential investors for its Engineering Procurement and Construction business.”
Last month, the firm had said that three of its lenders, including IDBI Bank have decided to convert loans worth Rs. 22.25 crore into equity.
Following the transaction, the lenders equity holding into the infrastructure firm will increase to 55.43 per cent.
Besides, Gammon India is selling its road projects to pare debt.
Earlier this month, the firm said it has completed the first tranche of stake sale in nine projects on approval from National Highways Authority of India (NHAI) and lenders.
The infrastructure firm had announced to sell stakes in 9 projects, valued at Rs. 6,750 crore to Brookfield and Core Infra India Fund, a deal that will fetch Rs. 563 crore on completion as well as reduce its debt considerably.
Shares of the firm today witnessed a spurt in volume of almost six times at the BSE.