The Company has provided Corporate Guarantee in favour of IDBI Bank Limited for an aggregate amount of Rs. 240 Crore for securing the working capital facilities sanctioned to Smart metering ....
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GMR Power and Urban Infra Limited has extended a corporate guarantee of Rs. 240 crore in favour of IDBI Bank Limited. The guarantee secures working capital facilities of Rs. 80 crore each, sanctioned to three step-down subsidiaries: GMR Kashi Smart Meters Limited, GMR Triveni Smart Meters Limited, and GMR Agra Smart Meters Limited. The guarantee will remain valid until the commissioning of the respective smart meter projects. The company has clarified this as a contingent liability with no immediate impact on its financials. The transaction is conducted at arm's length and promoters have no special interest beyond their shareholding.
This increases GMR's contingent liabilities, though no immediate financial impact is expected. If the subsidiaries default on the Rs. 240 crore working capital facilities, GMR would be obligated to fulfil the guarantee, which could pressure its balance sheet.