Intimation of Loan Agreement.
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Suraj Industries Ltd has signed a new loan agreement with its material subsidiary Carya Chemicals & Fertilizers Private Limited, in which it holds an 85.75% stake. The company will lend Rs. 20 Crore as an unsecured inter-corporate loan at an interest rate of 9.85% per annum for a maximum tenure of 3 years. The funds are meant for CARYA's Distillery Project. The loan is also convertible into equity shares of CARYA at any time during the loan tenure. Separately, Rs. 2.60 Crores is already outstanding from earlier loan agreements (dated October 2023, January 2024, and September 2024). The transaction has been done at arm's length and no security has been provided against this new loan.
This is a new credit facility extended to a subsidiary for its distillery project, supporting growth but exposing Suraj Industries to the subsidiary's project execution and repayment risk. The equity conversion clause gives the parent flexibility to convert debt into ownership, which could strengthen its control over CARYA if exercised.