SEIL · price
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Shanti Educational Initiatives Ltd has issued a Letter of Comfort to ICICI Bank Limited in favour of its subsidiary, Uniformverse Private Limited. The comfort letter supports credit facilities of Rs. 59.10 million availed by the subsidiary from ICICI Bank. The company has committed that it will not dilute its beneficial ownership in the subsidiary without prior written consent if the borrower fails to fulfill commitments, and will indemnify ICICI against losses from non-fulfillment of obligations. The company has clarified that this Letter of Comfort is not a formal guarantee. The promoter or promoter group has no interest in this transaction.
This is a contingent liability exposure of Rs. 59.10 million for the parent company, though it is not a formal guarantee. Shareholders should note the indemnification obligation to ICICI Bank in case the subsidiary defaults on its credit facilities.