SEPC JV Receives Termination Notice for ₹521.46 Crore EPC Contract; Arbitration Initiated

SEPC has informed the exchanges that its unincorporated joint operation, SEPC-Furlong JV, received a termination notice cancelling a significant infrastructure contract. M/s. Shalimar Corp Limited (SCL) issued the notice for the EPC sub-contract related to the widening and upgradation of the Shahjahanpur-Bisalpur section in Uttar Pradesh. The cancellation of this ₹521.46 crore lump-sum turnkey contract poses a material impact on the joint venture's order book.

Termination Notice Details

The termination notice, referenced as SCL/SZP/SEPC-Furlong/2026-26/01 dated July 2, 2026, was received via email on July 11, 2026. This development follows an earlier intimation on May 14, 2026, regarding the signing of the sub-contract and the receipt of the Letter of Acceptance (LOA). The company is currently awaiting the original copy of the termination notice.

The following table summarises the key details of the terminated contract:

Project Detail	Information
Project Name	Widening / Upgradation to four-lane configuration of Shahjahanpur – Bisalpur section
Location	Uttar Pradesh
Contract Value	₹521.46 crore
Contractor	SEPC-Furlong JV
Authority	M/s. Shalimar Corp Limited (SCL)
Notice Date	July 2, 2026

Arbitration and Regulatory Compliance

In response to the cancellation, the matter has been referred to arbitration. SEPC stated that it will inform the stock exchanges of any material developments in accordance with the SEBI (LODR) Regulations, 2015. The filing was made by T Sriraman, Company Secretary & Compliance Officer.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-1.90%	-7.04%	-15.40%	-30.61%	-54.93%	+26.99%

SEPC Ltd has announced a strategic proposal to acquire up to 90% equity stake in Avenir International Engineers and Consultants LLC for ₹1,530 crore through a preferential allotment of 153 crore equity shares at ₹10 per share. Approved by the Board of Directors on July 6, 2026, this all-share swap transaction targets the UAE-based engineering firm to expand SEPC's footprint in the Oil & Gas sector and leverage Avenir's qualifications with ADNOC. The acquisition, expected to conclude by December 2026, will be executed without any cash outflow. The proposed allottees—Avenir Oil Field Equipment L.L.C, Tranvel Holidays Private Limited, and Zoomstud Impex Private Limited—are classified as non-promoters.

To facilitate this expansion and strengthen its capital base, the board has approved increasing the authorized share capital from ₹225 crore to ₹600 crore. Additionally, the company seeks shareholder consent to raise the threshold for loans, guarantees, and investments by ₹3,000 crore under Section 186 of the Companies Act, 2013. The borrowing limits under Section 180 of the Companies Act, 2013 are also proposed to be increased by ₹7,500 crore to support business growth and working capital requirements.

Avenir International Engineers and Consultants LLC, established in 2011, reported a turnover of AED 75.01 million in 2025. The acquisition provides SEPC with access to the UAE's oil & gas ecosystem and pre-qualification status for projects in the Middle East and North Africa (MENA) region.

Transaction Details

The key parameters of the proposed acquisition are outlined below:

Particulars	Details
Target Entity	Avenir International Engineers and Consultants LLC, Abu Dhabi
Stake Acquired	90%
Consideration	₹1,530 crore (Share Swap)
Issue Price	₹10 per equity share
Total Shares Issued	153 crore equity shares
Expected Closure	December 2026

Shareholder Approval and Financial Performance

The company will conduct a postal ballot through remote e-voting from July 7, 2026, to August 5, 2026, to seek shareholder approval for these resolutions. M/s. Alagar & Associates LLP has been appointed as the scrutinizer for the process. In FY26, SEPC reported a Total Income of ₹1,085.80 Cr, EBITDA of ₹108.90 Cr, and a Net Profit of ₹53.50 Cr, more than doubling its profit compared to the previous year.