Enhancement in the Term Loan Limit granted to Paul Merchants Realtors Private Limited and modification of terms of interest payment on working capital facility allowed to the same company
PML · price
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Paul Merchants Limited's Board has approved two key financial decisions regarding its wholly-owned subsidiary Paul Merchants Realtors Private Limited (PMRPL). First, the term loan limit has been increased from Rs. 100 Crores to Rs. 150 Crores, with an additional delegated buffer of Rs. 50 Crores available to the Executive Committee, taking potential total exposure to Rs. 200 Crores. The loan carries an interest rate of 11% p.a. (reviewed quarterly) with a maximum tenure of 3 years. Second, the working capital facility of Rs. 25 Crores has had its interest payment frequency changed from monthly to half-yearly, with interest rate at 10% p.a. The company states these transactions are on arm's length basis and funded entirely from internal accruals.
Shareholders should note that this increases Paul Merchants Limited's maximum financial exposure to its subsidiary by Rs. 50 Crores. The shift in interest payment timing from monthly to half-yearly slightly defers cash inflows for the parent company, though the impact on PML's liquidity is described as negligible.