Gammon India Ltd will spin off its civil engineering, procurement and construction (EPC) business into a wholly owned unit where it may sell a stake as part of efforts to cut its debt.
The company said in a stock-exchange filing on Wednesday that its board has approved the spinoff and that it is evaluating proposals from potential investors for the civil EPC business.
The new unit, Gammon Retail Infrastructure Pvt Ltd, will house the civil EPC business carried on by Gammon India in roads, hydro-power and nuclear power sectors, and includes tunnels, bridges, buildings, cooling towers, chimneys and other projects.
The transfer is subject to approval from lenders and shareholders.
Gammon India has been struggling to repay loans and had reached an agreement with lenders to restructure its Rs 13,000 crore debt in September 2013. This is one of the largest debt restructuring packages approved by lenders in the past two years.
Last month, Gammon agreed to sell a 75 per cent stake in Transrail Lighting Ltd, which houses its tower and conductor manufacturing business, to financial information services provider Bilav Software Pvt Ltd.
In August, Gammon India unit Gammon Infrastructure Projects Ltd agreed to divest nine road and power projects to funds managed by global asset manager Brookfield and an infrastructure fund run by Kotak Private Equity.
Founded in 1922, Gammon India operates in three segments—construction and engineering, oil exploration and realty development.