GE T&D seeks shareholders' nod to double borrowing limit to Rs 1,000 cr

A special resolution has been proposed to borrow moneys up to Rs 1,000 crore over and above the aggregate of the paid-up share capital, securities premium and free reserves of the company, according to a notice for its 64th Annual General Meeting, to be held on September 28, 2020. Earlier, the shareholders had approved the borrowing of Rs 500 crore over and above the aggregate of paid-up share capital and free reserves of the company in its 58th AGM held on July 23, 2014.

GE T&D India, a leading player in the power transmission and distribution business, has sought shareholders' approval to double borrowing limit to Rs 1,000 crore. A special resolution has been proposed to borrow moneys up to Rs 1,000 crore over and above the aggregate of the paid-up share capital, securities premium and free reserves of the company, according to a notice for its 64th Annual General Meeting, to be held on September 28, 2020.

Earlier, the shareholders had approved the borrowing of Rs 500 crore over and above the aggregate of paid-up share capital and free reserves of the company in its 58th AGM held on July 23, 2014. According to the AGM notice, due to ongoing COVID-19 pandemic and economic downturn/uncertainty, there is a depletion in liquidity and cash flow within the organisation due to delay in payments by some of the key customers.

The company continues to pay its supplier as per the due date and continue to incur the monthly fixed expenses. Therefore this may require the company to avail more credit/ borrowings in coming quarters to manage the cash flow requirement, it explained.

The board at its meeting had approved to borrow money from GE India Industrial Pvt Ltd under cash pooling arrangement (CPA) payable on demand and not exceeding in the aggregate up of Rs 1,000 crore excluding interest in such borrowings. In view of decrease in retained earnings and increase in limit of borrowing from GE group companies, it is desirable to increase the borrowing powers of the company.

Therefore, the board has sought to raise the borrowing limit to Rs 1,000 crore through special resolution in the AGM later this month.

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