Submission of Intimation on giving of Guarantee for availing of credit facilities by Wholly Owned Matrial Subsidiary "SAI MACHINE TOOLS PRIVATE LIMITED"
Price
▲ positive · ▼ negative · ● neutral filings · teal = economic event · numbered = multiple that day (click to pick). Times IST.
Awaiting price reaction for this filing.
SMT Engineering Ltd is giving a corporate guarantee of up to Rs. 7.70 crore to Standard Chartered Bank on behalf of its wholly owned subsidiary, SAI Machine Tools Private Limited. The guarantee is to help the subsidiary secure working capital facilities. Promoter and Director Mr. Ashok Jaiswal has also pledged his personal land in Indore as additional collateral (mortgage by deposit of title deeds). The transaction is confirmed to be at arm's length, with no promoter group interest beyond this collateral pledge. As per the company, the guarantee will only show up as a contingent liability in the financial statements.
Shareholders should note that SMT Engineering is putting its balance sheet behind its subsidiary's borrowing, exposing the parent to contingent liability of up to Rs. 7.70 crore. While the company says there is no immediate financial impact, this increases the group's overall debt obligations and signals that the subsidiary needs additional working capital support.