BGR Energy shares in focus on termination of Rs 2,600-crore contract 

Shares of BGR Energy Systems are in news today after the industrial products firm said Tamil Nadu Power Generation Corporation has terminated a contract worth Rs 2,600 crore with the company. BGR Energy Systems shares ended 0.65% lower at Rs 100 against the previous close of Rs 100.65 on BSE. Market cap of the firm stood at Rs 721.62 crore on BSE. 

"We hereby inform you that the company has received ‘termination of contract’ letter from Tamil Nadu Power Generation Corporation Ltd (TNGCPL) (erstwhile TANGEDCO). This is with respect to establishment of 1 x 800 MW North
Chennai Super Critical Thermal Power Project, Stage III – Balance of Plant (BOP) package along with allied civil works EPC contract of value Rs 2600.02 crores, " said the firm. 

Stating the reasons behind the termination, the firm said:

1. The contractor was unable to fulfill key project obligations.

2. Critical systems remained incomplete.

3. The contractual requirements for insurance renewals and guarantee extensions were not met.

"The company is awaiting a positive outcome out of the Arbitration application pending before the Hon’ble High Court of Madras in this matter," said BGR Energy. 

There is no major impact on financials and/or operations of the company, it added. 

The company manufactures and sells On-line Condenser Tube Cleaning Systems, Debris Filters and Rubber Cleaning Balls used in Thermal and Nuclear Power Plants.