Puravankara Limited has informed the Exchange about Giving guarantees on behalf of Purva Oak Private Limited, a wholly owned subsidiary of the Company.
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Puravankara Limited has provided a corporate guarantee of Rs. 150 Crores on behalf of its wholly owned subsidiary, Purva Oak Private Limited. The guarantee is in favour of Catalyst Trusteeship Limited and backs the issuance of Commercial Papers of the same value by the subsidiary. Since the subsidiary is wholly owned, its accounts are consolidated with Puravankara's, and the company states there is no immediate financial impact. The promoters and group companies have no interest in this transaction other than through the subsidiary.
This is a contingent liability for Puravankara, but since the guaranteed entity is a wholly owned subsidiary consolidated in its accounts, the financial impact is neutral. Investors should note the increased off-balance-sheet exposure of Rs. 150 Crores tied to the subsidiary's short-term borrowing via Commercial Papers.