GOCL Corporation Limited has informed the Exchange about giving guarantee/providing security for third party
GOCLCORP · price
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Awaiting price reaction for this filing.
GOCL Corporation's Board has approved providing security on its land properties along with a corporate guarantee to back loans of up to Rs. 220 crores taken or to be taken by Hinduja Energy (India) Limited (HEIL). The promoter's group entity (Hinduja Capital Limited) holds a 19.99% stake in HEIL, and the transaction is being carried out at arm's length. GOCL will earn a commission/charge on the guarantee amount. The company states the impact on the listed entity is nil, though this represents a significant contingent liability.
This is a contingent liability of up to Rs. 220 crores for GOCL on behalf of a group-related entity, which could concern risk-averse investors. However, the arm's-length pricing and commission income soften the impact, and the company itself reports no material impact.