HCC to revamp Lavasa finances, decide on IPO

MUMBAI Sun Nov 13, 2011 7:01pm IST

Ajit Gulabchand, Chairman and Managing Director of Hindustan Construction Company, speaks during an interview with Reuters at the World Economic Forum (WEF) India Economic Summit in Mumbai November 13, 2011. REUTERS/Vivek Prakash

Ajit Gulabchand, Chairman and Managing Director of Hindustan Construction Company, speaks during an interview with Reuters at the World Economic Forum (WEF) India Economic Summit in Mumbai November 13, 2011.

Credit: Reuters/Vivek Prakash

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MUMBAI (Reuters) - Hindustan Construction Company, one of country's largest builders, will revamp the financial structure of its Lavasa arm and decide whether to revive plans for an IPO after the unit won environmental clearance last week to resume construction after a year's delay, its chairman said.

Lavasa, a $31 billion township in the western hills, was ordered to stop construction 12 months ago due to government wrangling over green laws. The delay cost Hindustan Construction $400,000 a day and forced the firm to abandon plans for an initial public offering for the project.

"We must now restructure the whole financial structure of the project," Ajit Gulabchand told Reuters in an interview on Sunday on the sidelines of a World Economic Forum event in Mumbai.

"It's a one-year delay which has added extra costs, so we will have to look at that," he said.

The environment ministry on Wednesday gave conditional clearance to the Lavasa project, ending a long-running dispute. That and other stalled projects in Asia's third largest-economy have spooked investors and hurt business confidence in the country.

"We will get things back on track, and then look at the long-term picture a little later ... we're focused on the next 90 days to get (construction) moving," said Gulabchand.

The Lavasa project was roughly one-third built when construction was ordered to be halted.

Gulabchand also said Hindustan Construction (HCC) is in talks with an unnamed construction firm in Abu Dhabi to form an association with Steiner, a Swiss developer it bought a controlling interest in last year.

Gulabchand is also in talks with Bhutan to bring the Lavasa township model to the reclusive Himalayan kingdom, he said.

"They want to exploit the green aspect," he said.

"They don't want to exploit their minerals, but tourism instead."

For more Reuters coverage of the World Economic Forum India Economic Summit, click: here

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