Issuance of Corporate Guarantee to M/s. RAR Fincare Limited
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Coromandel Engineering Company has issued a corporate guarantee of Rs. 1 crore to RAR Fincare Limited on behalf of Mrs Kalaiarasi, a relative of the company's Chairman and Managing Director Mr G V Manimaran. The guarantee covers a business term loan facility availed by Mrs Kalaiarasi, with a tenure of 36 months including a 6-month moratorium period. The company has confirmed the transaction was conducted at arm's length and that the promoter/promoter group has no direct interest in it. The guarantee will be reflected as a contingent liability in the company's financial statements.
This is a related-party guarantee of relatively small size (Rs. 1 crore) that does not directly impact the company's financials beyond a contingent liability disclosure. Shareholders should note that if the underlying borrower defaults, the company could be called upon to honor the guarantee, but the risk appears limited given the arm's length classification.