Issuance of Corporate Guarantee by the Company on behalf of its Joint Venture entity.
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Valor Estate Limited is issuing a corporate guarantee of up to ₹712 Crores on behalf of its joint venture entity, Bamboo Hotel & Global Centre (Delhi) Private Limited, to secure a term loan facility. The lenders are Kotak Mahindra Bank, RBL Bank, Federal Bank, and Aditya Birla Finance Limited, with Catalyst Trusteeship Limited acting as the security trustee. The JV is undertaking this borrowing at arm's length terms, and both joint venture partners are providing corporate guarantees. The guarantee will require accounting treatment and disclosure under Ind AS 109.
This is a contingent liability for Valor Estate shareholders — if the JV defaults on the ₹712 Crore loan, the company is on the hook. While it enables funding for the JV's project, it exposes the company to significant financial risk relative to its size.