The company closed its accounts for nine months ended September 30, 2014, recording a consolidated net loss of Rs 728.88 crore.
In a filing to BSE, Gammon said: “The current period ending March 31, 2016 is for 18 months and the previous period the company had closed its account for the nine month period ended September 30, 2014. Therefore the figures for current audited period are not strictly comparable with those of the previous audited period.”
It further said that the Ministry of Corporate Affairs has directed the company to either recover remuneration paid to Abhijit Rajan, chairman and managing director, for the period April 1, 2012 to September 30, 2014 or to file application for waiver of renumeration paid.
The company’s operating results have been affected in the last few years due to various factors including liquidity crunch, unavailability of resources on timely basis, delays in execution of projects, delays in land acquisition, approval of design etc by client, scarcity of labour and materials as well as operational issues, it said.
Its total income from operations stood at Rs 8,099.28 crore for the 18 months ended March 31.
The company’s total expenses during the period under review stood at Rs 7,181.89 crore.
Its overseas operations are characterised by weak order book, paucity of working capital and uncertain business environment. This has also resulted in various winding up claims filed against the company.
It further said that the company is exploring various options for overcoming liquidity crisis. It is also in discussions with clients for clearing bottlenecks in timely execution of projects.
The company is evaluating and exploring various courses of action for raising funds for company’s operations including options for strategic restructuring.
However, Gammon said, due to continuing stress and
inability of promoters to infuse fresh funds amid losses, the corporate debt restructuring empowered group has discussed the proposal of CDR lenders for invocation of SDR in the company and separate civil engineering, procurement and construction and the transmission and distribution businesses.
The lenders invoked strategic debt restructuring. As per the SDR proposals lenders can convert their debt into equity up to Rs 300 crore. As on date the lenders have converted Rs 272.22 crore of the debt into equity representing 62.77 per cent of equity capital.
The company, as part of its revival plan, has decided to carve out the civil EPC and transmission and distribution businesses into separate companies through the process of Business Transfer Agreement (BTA) and scheme of arrangement. This will help in getting new investors in the respective companies, it said.
It added that “companies will develop/monetise its investments in India and also outside India in coming years to repay the loans remaining in the company”.
The company further said that there are disputes in six projects of the company. The total exposure against these projects is Rs 355.56 crore and the company is pursuing legal recourse for addressing the disputes in favour of the company.
Gammon Group as part of its restructuring activities has decided to divest all its non-core investments, including its investment in Sofinter Group. As part of this process, an investor has shown interest in acquiring the entire 67.5 per cent stake in Sofinter held by Gammon Group.