The development comes after VIL disclosed on September 11 that its existing sale and purchase agreement with VEL, executed on September 29, 2016 for a 10-year period, was set to expire on September 30, 2026.
The agreement could not be renewed from October 1 as VEL had not received the required approval from its public shareholders for the proposed renewal, VIL had said in its earlier disclosure.
Following the disclosure, VIL said it undertook various measures to ensure business continuity as part of its contingency plans. At the same time, it held discussions with VEL on entering into a supply agreement on revised terms to avoid any disruption to its business operations.
Following these discussions, VIL and VEL agreed to enter into the revised supply agreement for a period of 12 months, the company said.
The revised agreement was approved by VIL’s Audit Committee and Board of Directors at their respective meetings held on September 30.
However, execution of the revised agreement remains subject to approval from the shareholders of both VIL and VEL, in accordance with the applicable provisions of the SEBI Listing Obligations and Disclosure Requirements (LODR) Regulations, stated the exchange filing.
Further details, including the notice for the Extra-Ordinary General Meeting, will be communicated in due course, VIL said.
Shares of Vadilal Industries were trading in the red, down 0.16% at ₹7,265.50 on the NSE as of 3:00 PM.
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