BGR Energy strikes off Rs 1,902 cr contract of Damodar Valley Corp

DVC confirmed to the company that the power project RTPS Phase-II will not be executed

BGR Energy Systems Ltd has said that a Rs 1,901.57 crore contract with Damodar Valley Corporation for the Phase-II Raghunathpur Thermal Power Project has been terminated, as the project will not be executed.

In a regulatory filing, the company said that the contract terminated was for supply of 2x660 Mw Steam Generator ("SG") package for the power project.

DVC has confirmed that the power project RTPS Phase-II, for which the SG package were to be supplied, will not be executed and hence short closed the contract with the company by exercising the right of termination for "Employer's convenience", it said. Following this, BGR Energy has struck off the contract from its order book and is initiating steps for recovery of cost and certain payments and settlement in terms of the contract.

Consequent to the termination of this contract the current order book value of the company is Rs 5,461 crore, it added.

The company is also seeking shareholders' approval to raise upto Rs 10,000 crore together with interest and other charges, by mortgaging its movable or immovable assets, through a resolution to be presented in the company's Annual General Meeting in September 14, 2016.