Vitol encashes USD 10 million bank guarantee; company disputes alleged default, to contest legally
EKI Energy says Vitol has encashed a USD 10 million Bank Guarantee after a Notice of Termination alleging an Event of Default.
By ScoutQuest · · 2 min read
- Bank Guarantee Encashed
- USD 10 million Bank Guarantee encashed by Vitol
- Net Worth (Standalone)
- ₹ 418.93 crore standalone
- Net Worth (Consolidated)
- ₹ 382.48 crore consolidated
The guarantee arrangement
The company had entered into a binding Voluntary Emission Reduction Purchase Agreement dated April 8, 2022 (as amended by Addendum No. 1) with Vitol Asia Pte Ltd, Singapore. Under that agreement, the company's bank, ICICI Bank Limited, issued a counter guarantee in favour of The Hongkong and Shanghai Banking Corporation Limited, Singapore, and HSBC issued a Bank Guarantee of USD 10 million in favour of Vitol.
The trigger
Vitol issued a Notice of Termination dated November 4, 2026 alleging an Event of Default. The company has received communication from the bank regarding the invocation and encashment of the Bank Guarantee by Vitol amounting to USD 10 million.
The company's position
- It disputes the alleged Event of Default and the consequent termination and invocation of the Bank Guarantee.
- It states that the invocation is without basis and not in accordance with the terms of the Agreement.
- It intends to contest the matter through appropriate legal proceedings, including arbitration in accordance with the dispute resolution provisions of the Agreement, and reserves all its rights and remedies.
Financial position cited
- Total equity (net worth) stood at ₹ 418.93 crore on a standalone basis.
- Total equity (net worth) stood at ₹ 382.48 crore on a consolidated basis.
- These figures are as per the audited financial results for the year ended March 31, 2026.
- The company states it is well placed to meet its obligations and continue its operations in the ordinary course.
What this means for a retail reader
A bank guarantee is a promise by a bank to pay a counterparty if a contractual obligation is not met. Here, the counterparty has drawn on that guarantee, so USD 10 million is being claimed under it. The company is not accepting that it defaulted and is taking the dispute to legal proceedings, including arbitration. The company has also placed its net worth figures alongside the disclosure so readers can weigh the size of the claim against its equity.
What to watch
- Developments in the legal proceedings and arbitration, and any further updates the company says it will give to the exchanges as events unfold.
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SEBI order imposes Rs. 88 Lakh penalty; company restrained from securities market for 2 months
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More numbers
- Bank Guarantee issued by HSBC in favour of VitolUSD 10 million
- Bank Guarantee invoked and encashed by VitolUSD 10 million
- Total equity (net worth), standalone, FY ended March 31, 2026₹ 418.93 crore
- Total equity (net worth), consolidated, FY ended March 31, 2026₹ 382.48 crore
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