March 26, 2019 / 10:14 AM / a year ago

UPDATE 1-India's HCC to sell litigation claims to BlackRock-led investors

(Adds details of deal, debt figure, shares)

March 26 (Reuters) - Hindustan Construction Company Ltd (HCC) said on Tuesday it would sell rights to a portfolio of awards and claims on projects tied up in litigation to a consortium of investors led by BlackRock Inc for 17.50 billion rupees ($254.2 million).

The deal is likely a relief for the engineering and construction company, which has seen its financials suffer as a result of stalled projects and payments held back by the government against claims by contractors.

A part of the consideration it receives will be used to prepay debts worth 12.50 billion rupees, and the deal will result in a partial write-down of the company's net worth as on March 31, HCC said in a statement here

The value of the awards and claims is pegged at 20 billion rupees, it added.

HCC will set up a special purpose vehicle to carry out the transaction, which will issue non-convertible debentures to the investors.

The company had gross debt of 34.90 billion rupees as of Dec. 31, 2018, and its order backlog stood at 182.13 billion rupees, HCC said in its latest quarterly report.

As on March 31, 2018, the company had won arbitration claims amounting to 48.23 billion rupees, of which it had collected 14.16 billion rupees, according to its annual report for the year ended March 2018.

HCC shares jumped as much as 10.8 percent after Tuesday’s announcement. They settled 8 percent higher in Mumbai market that was up 1.14 percent. ($1 = 68.8450 Indian rupees) (Reporting by Chris Thomas in Bengaluru; Editing by Subhranshu Sahu and Gopakumar Warrier)

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