Intimation about providing Corporate Guarantee
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Awaiting price reaction for this filing.
KG Petrochem's board, meeting on April 1, 2025, approved providing a corporate guarantee of Rs. 20 crore to HDFC Bank to secure a credit facility being availed by Suave Casa Ideas Private Limited, a company led by the same promoter group. The guarantee is at arm's length, with a 0.5% per annum commission charged by KG Petrochem. The board also raised the Section 186 investment/loan limit to up to Rs. 100 crore, approved related party transactions under Section 188, and called an Extra Ordinary General Meeting on April 28, 2025, for shareholder approval. All key decisions, including the guarantee, are subject to shareholder nod.
The Rs. 20 crore guarantee is a contingent liability that could affect KG Petrochem's balance sheet if the related party defaults, exposing shareholders to risk beyond the core petrochem business. The related-party nature of the deal and the need for shareholder approval mean investors should watch the EOGM outcome closely.