Intimation regarding issuance of Corporate Guarantee
LLOYDSENT · price
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Lloyds Enterprises Limited's board has approved issuance of an unconditional and irrevocable corporate guarantee for Geomysore Services India Pvt Ltd (GMSI) in connection with a NCD issue of Rs. 170 crores (1,700 debentures at Rs. 10 lakh each). The guarantee is issued jointly and severally with Thriveni Earthmovers Private Limited and Prakar Estates and Promoters LLP in favour of Axis Trustee Services Limited. This is a related party transaction as Lloyds Enterprises holds a 30.48% economic stake in GMSI through its 50% investment in Prakar Estates and Promoters LLP. The company clarified the transaction is at arm's length and the guarantee will be treated as a contingent liability.
The corporate guarantee creates a contingent liability of Rs. 170 crores for Lloyds Enterprises, meaning the company could be on the hook if GMSI defaults on its debenture obligations. This adds financial risk exposure for shareholders, particularly given the related party nature of the transaction.