Ravindra Energy Limited has informed the Exchange about providing corporate guarantee for financial assistance facility availed by associate entity- "Energy In Motion Limited"
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Ravindra Energy Limited (REL) has increased its corporate guarantee for its associate entity Energy In Motion Limited (EIM) from INR 135 Crore to INR 296 Crore, covering credit facilities (fund-based and non-fund-based) sanctioned by YES Bank. A separate hedge facility of INR 32 Crore is also part of the arrangement. EIM, in which REL holds a 49.50% equity stake, will use the funds to expand its business operations. The guarantee is described as a non-fund-based contingent liability with no immediate financial impact on REL, and is stated to be at arm's length. Promoter Narendra Murkumbi serves as a common director in both companies, making it a related-party transaction.
While REL management frames this as harmless contingent liability, the guarantee is more than double the associate's own paid-up equity (Rs. 100.48 Crore), exposing REL shareholders to meaningful credit risk if EIM struggles to service its debt. Investors should monitor EIM's business performance, as any default could translate into a direct liability for the listed company.