Hubtown Limited has informed the Exchange about Giving guarantees/indemnity/ becoming a surety for third party
HUBTOWN · price
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Awaiting price reaction for this filing.
Hubtown Limited has issued a corporate guarantee to Catalyst Trusteeship Limited (acting as Debenture Trustee) to secure Non-Convertible Debentures (NCDs) of up to Rs. 300 Crores being raised by Joynest Premises Private Limited, a subsidiary of the company. The NCDs will be subscribed by funds managed by Neo Asset Management Private Limited and its co-investors, and issued in one or more tranches. The proceeds will be used to fund construction and development of the second phase (H wing onwards) of the 'Hubtown Seasons' project in Chembur, Mumbai, which is being jointly developed by Joynest and Hubtown. The guarantee will be recorded as a contingent liability in Hubtown's books, and the transaction has been carried out at arm's length.
This signals continued fund-raising activity by the Hubtown group to push its flagship Chembur project forward, but the Rs. 300 Crore corporate guarantee adds a sizeable contingent liability to the parent company. Shareholders should watch execution progress of Hubtown Seasons and any future debt levels of the subsidiary.