Gammon India, construction and engineering company, announced that the corporate debt restructuring (CDR) lenders i.e banks are likely to take control of the company under the Strategic Debt Restructuring (SDR) scheme.

The company said, "Corporate Debt Restructuring Empowered Group-(CDR EG) in its meeting held on Nov. 23, 2015 has discussed and noted the invocation of Strategic Debt Restructuring (SDR) in the company by the CDR Lenders, pursuant to RBI Circular dated June 8, 2015."

Gammon India has decided to convert part of company's Rs 150 billion debt into equity in a prelude to changing its management in a so-called strategic debt restructuring (SDR) exercise.

As per the Reserve Bank of India's SDR norms, announced on June 8, banks are allowed to convert their debt into majority equity in a company where they feel the need to change management.

Project delays caused by issues related to land acquisition and government clearances in recent years have constrained corporate cash flows and made it difficult for the company to repay its debt.

Shares of the company gained Rs 2.58, or 19.98%, to trade at Rs 15.49. The total volume of shares traded was 1,001,848 at the BSE (12.15 p.m., Tuesday).