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CG Power and Industrial Solutions has rescinded its royalty agreement with Avantha Holdings (AHL), the company said in an exchange filing.
In the statement, it said, "the company has intimated AHL of rescinding the Royalty Agreement and consequently does not have any liability towards payment of brand royalty including the monetisation proposal."
As per the Royalty Agreement, a 50 percent brand loyalty was to be paid by CG Power to AHL "in perpetuity aggregating to Rs 411.20 crores". This was for the part settlement of outstanding loans due from Avantha group of companies and for reducing the regular royalty payments to 0.50 percent of the company's annual consolidated net operating revenues, it added in the statement.
The board of CG Power had earlier in August asked Gautam Thapar to step down as chairman and thereafter, forced CEO KN Neelkant to resign.
CG Power reported narrowing of consolidated net loss in July-September to Rs 61.47 crore from Rs 101.83 crore in the same period of the previous year, according to the regulatory filing by the company.
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