Pursuant to applicable provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed herewith the Postal Ballot Notice dated July 22, ....
Awaiting price reaction for this filing.
SRM Energy Limited has issued a Postal Ballot Notice seeking shareholder approval to sell its entire investment (13,20,000 equity shares of Rs. 10 each) in its wholly-owned subsidiary M/s. SRM Energy Tamilnadu Private Limited (WOS) to its holding company M/s. Spice Energy Private Limited for a token lump sum consideration of Rs. 1,00,000. The WOS has been non-operational, has a loan of approximately Rs. 43.27 crores (attached by SEBI from a promoter), and has approached NCLT under Section 10 of the IBC for insolvency resolution; its share price was determined as negative by a Category-1 Merchant Banker in 2023. The holding company has been extending loans (~Rs. 3.11 crores outstanding) to support SRM Energy's daily operations and the proceeds from the sale will be used for working capital or adjusted against this outstanding liability. A second resolution seeks approval for the related party transaction with Spice Energy Private Limited, with the holding company itself barred from voting on both resolutions.
Minority shareholders are being asked to approve the disposal of a distressed subsidiary at a nominal price of just Rs. 1 lakh, which effectively relieves SRM Energy from the indirect burden of the WOS's liabilities but delivers negligible value. The transaction signals significant financial stress at both the subsidiary (heading for insolvency) and the parent level (dependent on holding company loans), and approval outcome could affect the stock price sentiment and the company's future strategic direction.