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Hathway raises borrowing limit to Rs 16 bn; gets nod to assist subsidiaries

MUMBAI: Hathway Cable & Datacom has taken an enabling resolution to raise borrowings to the tune of Rs 1,600 crore (Rs 16 billion). The multi-system operator (MSO) has also got shareholders’ approval for providing assistance to its subsidiaries to the tune of Rs 1,000 crore ( Rs 10 billion).

Hathway’s standalone entity has a debt of Rs 1,100 crore ( Rs 11 billion). So, its borrowing limit has been raised by another Rs 500 crore ( Rs 5 billion).

Shareholders of Hathway Cable & Datacom have approved the special resolution which would enable the company to seek more funds by way of borrowings to support its future plans. Additionally, the company can also provide funds to its subsidiaries to meet their expansion drive.

The shareholders have provided their seal of approval through postal ballot, the result of which was released on Monday.

Now that the shareholders have given their approval, Hathway’s ceiling has been raised to Rs 1,600 crore (Rs 16 billion) through borrowings against paid-up equity capital and free reserve.

Similarly, the said resolution enabled the company to invest or to provide loans and advances, or even sign guarantees/securities up to 100 per cent of free reserves and securities premium account or Rs 1,000 crore, whichever is higher.

The passage of resolution, which saw 99.67 per cent in favour of resolution, empowers the board of directors of the MSO to explore borrowing as an option of financing future requirements.

These special resolutions are in line with Section 186 of the Companies Act, 2013 which was enacted in May 2014.

The company had sought shareholders’ nod for increasing the borrowing limit. Earlier, the board of directors had approved the said proposal and decided to seek shareholders’ nod for the same.

This resolution was necessitated by enactment of the Companies Act, 2013 that introduced several changes to the way businesses are governed in India. Basically, the aim here was to prevent the company from making investment through two layers.

Hathway’s stock settled the day 1.15 per cent higher at Rs 315.55 a share on the BSE.