Greaves Cotton Limited has informed the Exchange about issuance of corporate guarantee on behalf of GEML.
GREAVESCOT · price
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Greaves Cotton Limited has issued a corporate guarantee of Rs. 40 crores to Tata Capital Limited on behalf of its material subsidiary, Greaves Electric Mobility Limited (GEML). The guarantee serves as security for a 2-year term loan facility that GEML has availed from Tata Capital. The transaction has been carried out at arm's length, and promoters or group companies have no interest in it. While there is no immediate financial impact, this guarantee creates a contingent liability for Greaves Cotton, meaning the parent company would be liable to pay if GEML fails to meet its repayment obligations.
Shareholders should note the Rs. 40 crore contingent liability exposure, which represents the maximum potential outflow if the EV subsidiary defaults. The move supports funding for the EV business, but investors should monitor GEML's repayment capacity closely as any default would directly hit the parent company.