Hindustan Construction Company (HCC) has achieved a major milestone in its ongoing deleveraging efforts by significantly reducing its corporate guarantee exposure related to the loan facilities of Prolific Resolution Private Limited (PRPL), an associate company. The company said this move will enhance long-term value for shareholders.

Earlier, as part of a lender-approved resolution plan, HCC had transferred around Rs 2,854 crore of debt and approximately Rs 6,508 crore in Awards & Claims to PRPL, while retaining a 49% equity stake in the entity. HCC had also provided a corporate guarantee covering 100% of PRPL’s outstanding debt. With accrued interest, PRPL’s total debt now stands at nearly Rs 3,935 crore, and Awards & Claims at around Rs 6,325 crore.

Following approvals from PRPL’s lenders, its Board, and other stakeholders, HCC’s guarantee obligation has now been reduced to Rs 571 crore, representing 20% of the principal amount transferred, down from a full guarantee earlier. HCC stated that this reduction supports its broader strategy to strengthen its balance sheet, improve its investment-grade profile, and enhance access to capital markets as the company scales operations.

The company added that the revised guarantee structure will facilitate access to larger credit facilities and support capital-raising initiatives, including the recently announced Rights Issue, backed by the promoter group. The updated guarantee framework has been formally executed in coordination with lenders and complies with all applicable regulatory and governance requirements.