HEG Limited has informed the Exchange about Approval for Grant of Inter-Corporate Unsecured Loan to Bhilwara Energy Limited, an Associate Company
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HEG Limited's board approved an unsecured loan of Rs. 210 crore to Bhilwara Energy Limited (BEL), an associate company in which HEG holds a 40.42% stake. The loan carries an interest rate of 9% per annum, has a 1-year tenure, and will be repaid as a bullet payment (principal + interest) at maturity. The purpose is to fund the growth plans of BEL. The loan is a related party transaction, done at arm's length, with no security provided. HEG has no existing loan outstanding to BEL. The deal is part of a broader restructuring where BEL is set to merge into HEG after the demerger of HEG's graphite electrode business, as per a scheme approved by both boards in March 2025.
Shareholders should note that Rs. 210 crore of company cash is being deployed into an associate, which may slightly reduce near-term liquidity but earns 9% interest. In the context of the ongoing merger with BEL, this loan could be a bridge measure ahead of the amalgamation. Watch for any updates on the merger scheme timeline.