Issuance of Corporate Guarantee to various Banks/NBFCs for an amount of up to Rs.300 crore against proposed term loan facility to be availed by LNJ Greenpet Private Limited, Wholly Owned Subsidiary of the Company
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RSWM Limited will issue a corporate guarantee of up to Rs. 300 crore to various banks and NBFCs on behalf of its wholly owned subsidiary, LNJ Greenpet Private Limited. The guarantee is being provided against a proposed term loan facility that the subsidiary intends to raise. As a wholly owned subsidiary, LNJ Greenpet's borrowing will be fully backed by RSWM's guarantee, making it a contingent liability for the parent company. The move suggests the subsidiary is planning capacity expansion, working capital needs, or refinancing through fresh term debt.
Shareholders should note that RSWM is taking on a contingent liability of up to Rs. 300 crore, which could pressure its debt profile if the subsidiary faces difficulties. However, since this supports a wholly owned subsidiary, any benefit from the subsidiary's growth will also accrue to RSWM shareholders.