For giving corporate Guarantee
Price
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Awaiting price reaction for this filing.
Rainbow Foundations Ltd is providing a corporate guarantee of up to Rs. 50 crore on behalf of its wholly owned subsidiary, Rainbow Foundations and Real Estates Pvt Ltd (RFRPVT). The guarantee is in favour of the Debenture Trustee appointed by RFRPVT, which is planning to issue Unlisted, Secured, Redeemable, Cumulative, Non-Convertible Debentures. None of the promoters, promoter group members, or directors have any interest in the transaction, and it is being done on an arm's length basis. The company states there is no immediate material impact beyond the disclosure requirement in financial statements.
While the company says there is no direct impact, this effectively means Rainbow Foundations is backing Rs. 50 crore of debt raised by its subsidiary, exposing the parent company to potential liability if the subsidiary defaults. Shareholders should keep an eye on the subsidiary's debt-servicing ability going forward.