CG Power enters into inter-creditor pact, calls off merger with subsidiary

Nearly three months after CG Power and Industrial Solutions (CG Power) first informed the exchanges about a financial fraud, the company has entered into an inter-creditor agreement with some of its lenders, called off a merger of a wholly-owned subsidiary, and initiated a recovery process. .

In a meeting that started on Sunday and extended to the early hours of Tuesday, the board of directors of CG Power approved the withdrawal of a scheme for the amalgamation of CG Power Solutions (CGPSOL), a wholly-owned subsidiary.

“The board of directors of the company has resolved to call off the proposed merger, given various issues arising from the discovery of irregular transactions and other findings expected from the investigation,” the company said. It also noted an inter-creditor agreement has been signed with nine of its 14 lenders, “constituting 87.68 per cent of total outstanding credit facilities of the company”.