Banka BioLoo Limited has informed the Exchange about Giving guarantees/indemnity/ becoming a surety for third party
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Banka BioLoo Limited has approved providing a Corporate Guarantee of up to Rs. 10 Crores to Northern Arc Capital Limited on behalf of its subsidiary, Megaliter Varunaa Private Limited, for a credit facility to be drawn in one or more tranches. The guarantee is unconditional and irrevocable and will remain in force until full repayment of the facility by the subsidiary. The subsidiary is a company where the Managing Director and CEO/Executive Director of Banka BioLoo also serve as directors, and the transaction has been carried out at arm's length. On a standalone basis, the guarantee will appear as a contingent liability for Banka BioLoo, with no impact on a consolidated basis as the subsidiary's accounts are merged with the parent.
This is a contingent liability of up to Rs. 10 Crores for the parent company. While it signals support for subsidiary-level growth or operations, shareholders should monitor whether the subsidiary generates sufficient cash flows to service the debt, as any default would fall on Banka BioLoo as guarantor.