We wish to inform that the Company has initiated a postal ballot for getting approval from members for the items mentioned in the postal ballot notice dated 08.07.2025. The Notice of postal ....
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Chrome Silicon Limited (formerly VBC Ferro Alloys Ltd) has initiated a postal ballot (e-voting from July 22 to August 20, 2025) seeking shareholder approval on four items. The key proposal is to enhance the corporate guarantee limit for related party Krishna Power Utilities Limited (KPUL) from Rs.350 Cr to Rs.500 Cr, as Union Bank of India has sanctioned a Rs.290 Cr term loan for KPUL's 60 MW coal-based power plant and ferro alloys complex. A new corporate guarantee of up to Rs.300 Cr is also proposed for Krishna Green Energee Pvt Ltd (KGEL), which is setting up a 19 MW waste heat recovery power plant. The company plans to invest up to 26% equity in both entities to qualify as a captive power user and secure cheaper electricity, since its own manufacturing was suspended due to high power costs. Additional pledges of equity shares (Rs.50 Cr for KPUL) and mortgage of company assets (Rs.150 Cr for KPUL) are also part of the package. The transaction values are material relative to Chrome Silicon's size — KGEL guarantee is 228% and KPUL guarantee is 921% of the company's annual consolidated turnover for FY25.
Shareholders are being asked to approve very large contingent liabilities (totaling up to Rs.800 Cr in guarantees, or roughly 11.5x annual turnover) for two unlisted related parties whose business operations have not yet commenced. While the strategic rationale of securing cheaper captive power is clear, the magnitude of exposure is significant and shareholders should weigh the long-term power cost benefits against the substantial guarantee risk being placed on Chrome Silicon's balance sheet.