The Union Cabinet decision that requires government agencies to pay 75 per cent of arbitral awards will result in SPML’s debt being reduced significantly. SPML has arbitration awards with interest of over Rs 250 crore, and with the cabinet decision, the company will get 75 per cent of this amount immediately. More than 50 per cent of the awards have already been upheld by the Hon’ble High Court and the Hon’ble Supreme Court.
Similarly, claims worth around Rs 500 crore are in advance arbitration stage. The cabinet decision will further help SPML to secure these awards within the duration of 12 months.
Subhash Chand Sethi, Chairman, SPML Infra, says, “We are pleased with the Cabinet’s decision regarding payment of arbitration awards to infrastructure companies. SPML will immediately be able to reduce its debt substantially, and within 12 to 24 months, it will go down even further. This is a good decision in the right spirit that will improve the functionality of infra companies”. SPML has a standalone debt of Rs 540 crore.