According to the notice for the company's 64th annual general meeting (AGM) that was scheduled to held on Monday (28 September 2020), a special resolution was proposed to borrow 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. The proposal was passed with the requisite majority at the AGM yesterday, the company said in a BSE filing made before market hours today.

In its 64th AGM notice, GE T&D said that due to ongoing COVID-19 pandemic and economic downturn/ uncertainty, there is a depletion in liquidity and cash flow within the organization 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. This may require the company to avail more credit/ borrowings in coming quarters to manage the cash flow requirement.

The board at its meeting held on 28 April 2020 approved to borrow money from GE India Industrial under cash pooling arrangement (CPA) payable on demand and not exceeding in the aggregate up of Rs 1000 crore excluding interest in such borrowings.

In view of decrease in retained earnings and increase in limit of borrowing from GE group companies it proposed to increase the borrowing powers and therefore board seeks fresh approval of members by way of special resolution under the Companies Act, 2013.

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 23 July 2014.

GE T&D India manufactures power transmission and distribution equipment. It reported a net loss of Rs 20.32 crore in Q1 FY21 as compared to a net profit of Rs 3.37 crore in Q1 FY20. Net sales during the quarter declined 12.4% to Rs 642.79 crore.

On a year-to-date (YTD) basis, the stock has tumbled 39.48% while the benchmark S&P BSE Sensex has lost 7.50% during the same period.