Prestige Estates Projects Limited has informed the Exchange about giving Corporate Guarantee to Joint Venture
PRESTIGE · price
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Prestige Estates Projects Limited is issuing a corporate guarantee of up to ₹712 Crore (Indian Rupees Seven Hundred and Twelve Crores) to secure a term loan facility being availed by its Joint Venture company, Bamboo Hotel and Global Centre (Delhi) Private Limited. The loan is being provided by a consortium of lenders including Kotak Mahindra Bank, RBL Bank, Federal Bank, and Aditya Birla Finance, with Catalyst Trusteeship Limited acting as the security trustee. The promoter/promoter group has an interest in the transaction, but since both promoters of the borrower are providing corporate guarantees, the deal is structured on an arm's length basis. The guarantee represents a contingent liability for Prestige, with the company stating there is no immediate impact.
This creates a contingent liability of up to ₹712 Crore for Prestige, exposing the company to potential repayment obligations if the JV defaults. While there is no immediate financial impact and the guarantee is part of normal JV business support, shareholders should monitor the JV's debt servicing capability as it directly affects Prestige's contingent risk exposure.