Godawari Power And Ispat limited has informed the Exchange about Execution of Facility Agreement for grant of additional Inter Corporate Loan of Rs. 40 Crores to Deccan Gold Mines Limited.
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Godawari Power and Ispat Limited (GPIL) has executed a facility agreement to grant an additional Rs. 40 Crore inter-corporate loan to Deccan Gold Mines Limited (DGML) from its surplus funds, taking the total loan outstanding to Rs. 120 Crores. The loan carries 12% per annum interest with monthly compounding (payable quarterly) and a 36-month tenure. Up to 90% of the funds will be deployed for the Altyn Tor Gold Project in Kyrgyzstan (operated by DGML's subsidiary), with the balance for general corporate purposes. The loan is secured by a pledge of 4,14,603 equity shares of Geomysore Services (India) Private Limited. GPIL's promoter group company Hira Infra-tek holds 9.95% in DGML, but the transaction is classified as not a related party transaction.
GPIL is deploying surplus cash to earn a 12% yield, which is positive for interest income. However, the total Rs. 120 Crore exposure to fund a foreign gold mining venture in Kyrgyzstan carries geopolitical and project execution risk for shareholders, though the loan is partially secured by pledged shares.