Prestige Estates Projects Limited has informed the Exchange about Issuance of Corporate Guarantee to wholly owned subsidiary.
PRESTIGE · price
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Awaiting price reaction for this filing.
Prestige Estates has issued a corporate guarantee of up to INR 2,110 Crores to State Bank of India / Catalyst Trusteeship Limited to secure a loan facility being availed by its wholly owned subsidiary, Prestige (BKC) Realtors Private Limited. The subsidiary is likely undertaking a real estate project in the Bandra Kurla Complex (BKC) area of Mumbai. The company confirmed the transaction is at arm's length and that promoters have no direct interest in it. The guarantee is treated as a contingent liability for the parent, with management stating no immediate impact on Prestige Estates.
This is a large contingent liability (up to INR 2,110 Crores) for the parent, but since the borrower is a wholly owned subsidiary, the risk is contained within the group. Shareholders should keep an eye on the subsidiary's project execution and repayment ability, as any default would ultimately fall back on Prestige Estates.