Punj Lloyd 'set on working with creditors'

Cash-strapped Punj Lloyd is said to be committed to working with its creditors to ensure work for its key projects here will not be disrupted.

Two Singapore units of the Indian engineering and construction group - Punj Lloyd and Sembawang Engineers and Constructors - have filed for a scheme of arrangement with creditors.

Punj Lloyd told the Bombay Stock Exchange on Sunday that its two units are seeking approval from the High Court here on the matter, as it works to "overcome the current short-term financial constraint on account of losses suffered in its projects".

A scheme of arrangement is a court-approved agreement between a company and its shareholders or lenders to reach a compromise as opposed to insolvency.

It is different from judicial management in that under a scheme, the company continues with its current management while judicial management involves bringing in independent accountants in place of the management.

Companies typically opt for the scheme of arrangement route instead of judicial management because they want to retain control over the company and revive it.

Punj Lloyd is the holding company for the group's subsidiaries in the Asia-Pacific region, as well as an engineering, procurement and construction contractor for several projects here.

It is building a lube oil blending plant and a grease manufacturing plant for Shell Eastern Petroleum.

Sembawang Engineers and Constructors' major ongoing projects here include the $118.5 million construction of the new prison headquarters at the Changi Prison Complex.

The firm is also working on McNair Towers - a public-housing development comprising four residential blocks in Boon Keng - which is expected to be completed by the fourth quarter of next year.

Sembawang Engineers and Constructors is also building the station and tunnel at the upcoming Stevens station of the Downtown Line 2, due for completion later this year.

This, together with the up-and-running Botanic Gardens station, is part of a $378.2 million contract awarded to the firm by the Land Transport Authority in 2009.

Works for the $180.6 million Lower Seletar Waterworks project are also under way.

A version of this article appeared in the print edition of The Straits Times on September 16, 2015, with the headline 'Punj Lloyd 'set on working with creditors''. Print Edition | Subscribe