Mukka Proteins Limited has informed the Exchange about Giving guarantees/indemnity/ becoming a surety for third party
MUKKA · price
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Mukka Proteins' Board has approved issuing a corporate guarantee of up to Rs. 35.37 crore in favour of Axis Bank to secure credit facilities being availed by Ocean Proteins Private Limited, the company's associate. The guarantee is being provided on an arm's length basis, though directors of Mukka Proteins are interested in Ocean Proteins by virtue of their directorship. This creates a contingent liability for Mukka Proteins to the extent of the facility availed by the associate company. The corporate guarantee agreement is yet to be executed.
Shareholders should note a contingent liability of up to Rs. 35.37 crore tied to an associate company, which is a related-party transaction. While arm's length in nature, this exposes Mukka Proteins to the credit risk of its associate and could weigh on the company's financial flexibility if the guarantee is ever invoked.