Infrastructure companies going through debt restructuring face stricter restrictions

Business

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By Religare

| Updated: Wednesday, January 8, 2014, 9:34 [IST]

The road doesn't get smooth for the infrastructure companies with the restructuring of debt, no matter how hard they try to fix their finances. According to an Economic Times report, companies going through the corporate debt restructuring, or CDR, process have been restricted from applying for contracts floated by some government agencies in Gujarat and Andhra Pradesh.

Companies like Gammon India, Hindustan Construction Company (HCC), Soma Enterprise and Costal Projects are a few names in infrastructure sector which have got their debt restructured and hence, are exposed to such restrictions which if spread to other states also, could lead to shutdown of operations.

The report said that HCC has already challenged the issue in court after Gujarat's Narmada Water Resources Water Supply and Kalspar Department invited bids for projects worth Rs 4,920 crore, but barred companies with weak financials from applying.

Similarly, the Andhra Pradesh Corporation imposed similar restrictions for 10 contracts worth a total Rs 1,965 crore for a drinking water supply project.

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