Vikran Engineering approves Rs 4,560 crore support for solar subsidiaries
The Board of Directors of Vikran Engineering Limited has approved corporate guarantees of up to Rs 3,400 crore and promoter contribution of up to Rs 1,160 crore to support its wholly owned subsidiaries engaged in the development and implementation of solar power projects.
The Board approved the issuance of corporate guarantees aggregating up to Rs 3,400 crore in favour of its wholly owned subsidiaries. The guarantees will enable the subsidiaries to obtain credit facilities from banks, financial institutions and other lenders for their business operations and the development of solar projects.
The company said the detailed terms, including the lending institutions, guarantee amounts, tenure and other commercial conditions, are yet to be finalised.
The Board has authorised the Corporate Affairs Committee to finalise the terms and execute the necessary agreements and related documents.
According to the filing, the guarantees will constitute contingent liabilities for Vikran Engineering. The company stated that there will be no immediate financial impact, except in the event that any subsidiary fails to meet its repayment obligations to the lenders.
The Board also approved promoter contribution of up to Rs 1,160 crore to its wholly owned subsidiaries. The investment will be made in one or more tranches to meet promoter contribution requirements under project financing arrangements and to support the subsidiaries’ business requirements.
The funding may be provided through multiple instruments depending on financing needs. These include subscription to equity share capital, unsecured loans, Non-Convertible Debentures (NCDs), Optionally Convertible Debentures (OCDs), quasi-equity instruments, or a combination of these instruments.
The company said the final structure of the funding will be determined based on project financing arrangements and the operational requirements of the subsidiaries.
The approved financial support is intended to strengthen the funding position of Vikran Engineering’s wholly owned subsidiaries as they pursue solar power projects and secure long-term project financing from lenders.
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