Olectra Greentech has issued a revised Irrevocable Undertaking with Indemnification obligation in favor of REC Limited (Lender), replacing an earlier undertaking. This relates to a facility availed by Evey Trans (MSR) Private Limited, a subsidiary, for executing a contract with MSRTC. The undertaking supports an advance facility of up to ₹300 Crores, part of a larger ₹6,578.42 Crore term loan.
Revised Undertaking Issued
Olectra Greentech has provided a revised Irrevocable Undertaking with Indemnification obligation to REC Limited (Lender) on November 25, 2024. This undertaking supports a facility for Evey Trans (MSR) Private Limited, a subsidiary acting as a Special Purpose Vehicle for a contract with MSRTC.
Details of the Facility
The undertaking pertains to an advance facility of up to ₹300 Crores, replacing an earlier LOC facility. This advance is part of a larger Rupee Term Loan of ₹6,578.42 Crores sanctioned to the Borrower.
Key Terms and Conditions
The earlier LoC Facility is restricted to ₹201.50 Crores (already issued), with no further LoC to be issued.
An advance of up to ₹300 Crores can be utilized by the Borrower exclusively for Bus procurement. If the Borrower makes an advance payment to the Bus Manufacturer (Olectra Greentech), it must be against a bank Guarantee/legally Binding and irrevocable Corporate Undertaking.
The Corporate Undertaking confirms that if the buses are not delivered and hypothecated within 120 days from the date of advance release, the Bus Manufacturer will refund the corresponding amount. An additional interest of 2% over the prevailing interest rate will be levied after the expiry of 120 days until payment to REC.
Impact on Olectra Greentech
Olectra Greentech will utilize the advance amount up to ₹300 Crores to make payments to key vendors and increase production levels. This facility helps in minimizing timelines for pending customer orders. This represents a financial commitment for Olectra Greentech, requiring the company to repay the Lender if it fails to deliver the buses, enabling the Borrower to hypothecate them within 120 days.
Source: BSE
