Amendment to inter inter-company loan agreement to the wholly owned subsidiary
KANCHI · price
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Kanchi Karpooram Ltd has amended its loan agreement with its wholly-owned subsidiary, Kanchi Agro Product Private Limited (KAPPL), in which it holds 100% equity. Under the amendment, interest on the existing inter-company loan has been waived for the period from 1st October 2024 to 13th November 2025. Additionally, the loan has been converted from a demand loan into an interest-free term loan, repayable by 31st March 2028. The original loan agreement was entered into on 10th May 2022. The disclosure confirms the transaction is a related-party transaction and is not at arm's length, as the Managing Directors of the parent company also serve as Directors on the subsidiary's board.
For shareholders, this means the parent company has forgone interest income from its subsidiary for over a year and extended an interest-free loan until March 2028, which could marginally affect interest earnings but signals continued financial support to the subsidiary.