Popular Vehicles and Services Limited has informed the Exchange about Giving guarantees/indemnity/ becoming a surety for third party
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Popular Vehicles and Services Limited has informed the stock exchanges about continuing corporate guarantees in favour of lenders (Sundaram Finance and IndusInd Bank) on behalf of its subsidiaries. For Prabal Motors Private Limited (Subsidiary), it is guaranteeing Rs. 2 crore (Trade Advance to Sundaram Finance) and Rs. 22.5 crore (Channel Financing of Rs. 15 crore plus Adhoc of Rs. 7.5 crore from IndusInd Bank for Daimler India Commercial Vehicle). For Popular Mega Motors (India) Private Limited (Wholly Owned Subsidiary), it is guaranteeing Rs. 5 crore (Trade Advance to Sundaram Finance). The total guarantee exposure aggregates to about Rs. 29.5 crore. The company clarified that none of the promoters or directors have any interest and that the transaction is at arm's length. The company stated there is no material impact on the listed entity other than disclosure in financial statements.
This is a routine inter-group guarantee renewal supporting subsidiary working capital needs; no direct financial impact on the parent other than contingent liability disclosure. Shareholders should note the incremental contingent exposure of ~Rs. 27.5 crore (net of the previously existing Rs. 2 crore guarantee) on the company's books.