Gensol Engg addresses recent credit rating downgrades, outlines strategic debt reduction plan

• Further, we deny any involvement in falsification claims and would be setting up a committee to comprehensively review the matter: Company spokesperson
• These are challenging times, and we are taking decisive steps toward strengthening our financial position and ensuring long-term financial stability

NE BUSINESS BUREAU

NEW DELHI/AHMEDABAD, MAR 7

Gensol Engineering Limited (GEL) acknowledges the recent credit rating downgrades by CARE and ICRA. The rating downgrade happened due to short-term liquidity mismatch which is improving by way of customer payments. That said, we understand the concerns these downgrades have raised and are committed to addressing them responsibly to all our stakeholders, a company spokesperson said.

“Further, we deny any involvement in falsification claims and would be setting up a committee to comprehensively review the matter. This underscores company’s commitment to accountability, transparency and sustainable business practices,” the statement added.

We would like to reinforce that the company has reported strong growth in key financial parameters across the board, the statement further said.

1. Orderbook of more than Rs 7000 imparting significant revenue visibility
2. Total Revenue has grown by 42% to Rs 1,056 in 9M FY25.
3. EBITDA has grown by 89% to Rs 246 in 9M FY25
4. PAT has grown by 34% to Rs 67 in 9M FY25

These are challenging times, and we are taking decisive steps toward strengthening our financial position and ensuring long-term financial stability. Below is a short summary of our current debt profile and key action items:

Current Debt

1. In GEL standalone, the current fund-based capital limit for Solar EPC stands at Rs 249
2. In GEL standalone, the term loan for EV vehicles stands at Rs 645
3. In the EV leasing subsidiary company, the current term loan stands at Rs 252
4. The total current debt stands at Rs 1,146 Cr. against the reserves of Rs 589 Cr. making it a debt- equity ratio of 1.95
5. In the current financial year, we have reduced our debt obligation by ~Rs 230

Strategic Deleveraging: We have initiated a series of asset divestments to significantly reduce our debt:

1. The sale of 2,997 electric vehicles worth Rs 315
2. The sale of a wholly owned Gensol subsidiary company for Rs 350
3. As a result of these two divestments, our debt will significantly reduce by Rs 665 Cr. resulting in a debt-equity ratio of 0.8.

While the company continues to pay its debt obligations, all proceeds from the above initiatives will be directly utilized toward repaying our existing debt and working capital obligations.

Through these periodic interventions and upcoming planned initiatives, we are resolute in our goal of achieving a zero net-debt status.

We are confident in our ability to navigate this period and emerge stronger. We value the trust of our stakeholders and will provide regular updates as we progress towards our financial goals, the spokesman further said.