Material Event
SEPC Receives Termination Notice for ₹521.46 Crore EPC Subcontract; Matter Referred to Arbitration
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BSE
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SEPC Limited has informed the stock exchanges that its joint operation, SEPC-Furlong JV, has received a copy of a termination notice via email from Shalimar Corp Limited (SCL), cancelling the previously awarded EPC subcontract and Letter of Acceptance (LOA) valued at ₹521.46 crore. The company has referred the matter to arbitration and stated that it will update exchanges on any material developments.
PRICE-SENSITIVE TRIGGER
Event: Receipt of termination notice for EPC subcontract and cancellation of Letter of Acceptance (LOA).
Type: Material Event
Impact: Negative
Immediate Effect: The termination notice cancels the EPC subcontract awarded to SEPC-Furlong JV for the Shahjahanpur–Bisalpur four-laning project in Uttar Pradesh, creating uncertainty over execution of the contract. The dispute has been referred to arbitration.
Financials:
Key Metrics:
- Contract Value: ₹521.46 crore
- Project: Widening/Upgradation to Four-Lane Configuration of Shahjahanpur–Bisalpur Section, Uttar Pradesh
- Contract Type: Lump-sum Turnkey EPC Subcontract
Highlight:
- SEPC-Furlong JV faces cancellation of a ₹521.46 crore EPC subcontract, with the dispute now referred to arbitration.
What Happened ?
SEPC Limited announced that it has received, via email, a copy of a termination notice dated 2 July 2026 from Shalimar Corp Limited (SCL) relating to the EPC subcontract executed by its unincorporated joint operation, SEPC-Furlong JV.
The notice informs the company of the cancellation of both the EPC subcontract and the associated Letter of Acceptance (LOA) for the Shahjahanpur–Bisalpur highway widening project. SEPC clarified that it has currently received only the emailed copy while awaiting the original notice.
The company further stated that the dispute has been referred to arbitration.
key details
Termination of EPC Subcontract:
- The disclosure relates to the EPC subcontract signed by SEPC-Furlong JV with Shalimar Corp Limited (SCL).
- The subcontract pertained to the four-laning of the Shahjahanpur–Bisalpur section in Uttar Pradesh.
- The original lump-sum turnkey EPC contract carried a value of ₹521.46 crore.
- SEPC has received an emailed copy of the termination notice dated 2 July 2026.
- The notice cancels both the EPC subcontract and the Letter of Acceptance (LOA).
- The original termination document is yet to be received by the company.
- The dispute has been referred to arbitration.
- SEPC stated that it will keep the stock exchanges informed of further material developments in accordance with SEBI (LODR) Regulations.
Note:
- The exchange filing does not specify the reasons for termination or quantify any financial impact arising from the cancellation at this stage.
Risk Analysis
Summary:
- The cancellation of a major EPC subcontract introduces execution and revenue uncertainty while exposing the company to legal proceedings through arbitration.
Key Risks:
- Potential loss of future revenue from the ₹521.46 crore project.
- Arbitration proceedings may be lengthy and outcome-dependent.
- Possible delay in replacement order inflows.
- Uncertainty regarding financial implications until arbitration concludes.
Worst Case:
- If arbitration is decided against SEPC or the contract is not reinstated, the company may permanently lose the project and its associated revenue opportunity, while potentially incurring additional legal or contractual liabilities.
Risk Level: High
Company Commentary
- SEPC has received a copy of the termination notice by email regarding the EPC subcontract and LOA.
- The company is awaiting receipt of the original notice.
- The dispute has been referred to arbitration.
- SEPC will inform the stock exchanges of any material developments in compliance with SEBI (LODR) Regulations.
Official Exchange Filing: SEPC Limited
