Filatex India Limited has informed the Exchange about providing the Corporate Guarantee in respect of taking term loan upto Rs. 200 crores (Rupees Two Hundred Crores) by Texfil Private Limited, Wholly Owned Subsidiary Company, from Punjab National Bank.
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Filatex India Limited has informed the exchange that it is providing a Corporate Guarantee for a term loan of up to Rs. 200 crores being taken by its wholly owned subsidiary, Texfil Private Limited, from Punjab National Bank. The guarantee covers the full borrowing of the subsidiary from PNB. This creates a contingent liability of up to Rs. 200 crores on the parent company's books. The loan is likely to fund the subsidiary's business operations or capacity expansion.
Shareholders should note the increased contingent liability on Filatex India, though since the guarantee is for a wholly owned subsidiary, the funds will support group-level growth. The market may view this neutrally unless the subsidiary's repayment capacity is in question.