GE T&D India, in a stock exchange communication, has informed that GE Grid Solutions has further extended the termination date of issuing new contracts for global engineering services to GE T&D India.
The termination date, which stood at August 31, 2021 now stands revised to December 31, 2021. This extension was granted on the request of the management of GE T&D India, the company said.
“The management continues to explore options to minimize the impact of such termination on the company,” the filing by GE T&D India said.
Background
- On April 30, 2021, GE T&D India announced that it was formally notified by GE Grid Solutions that effective June 30, 2021, no new contracts/purchase orders will be issued to GE T&D India Ltd in relation to short-term, non-exclusive contracts/purchase orders for global engineering services with other companies in the GE Grid Solutions division, outside India. Existing contracts/purchase orders would lapse at their expiry date or would be terminated by notice.
- This “effective date” was extended first to July 31, 2021, then to August 31, 2021, and now to December 31, 2021.
- Termination of such contracts directly affected Global Engineering Operations Division (GEOD), a division within GE T&D India, which carried out such services.
- GE T&D India said that it was exploring the possibility of redeploying the affected employees. GEOD has 190 employees and assets worth Rs.10 crore, which are now potentially redundant. GEOD was independently valued at Rs.87 crore by Ernst & Young Merchant Banking Services LLP.
- In January 2021, GE T&D India proposed to sell off GEOD to GE India Industrial Pvt Ltd (GIIPL). This proposal, though approved by the board of GE T&D India Ltd, did not receive majority consent by minority shareholders, and hence could not be pursued.
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