Corporate Guarantee of Up to Rs. 400 Crores Issued for Wholly Owned Subsidiary's Axis Bank Loan
The company is issuing a corporate guarantee of up to Rs. 400 Crores to secure a loan being availed by Prestige Hospitality Ventures Limited, its wholly owned subsidiary, from Axis Bank Limited.
- Guarantee Amount
- Rs. 400 Crores
- Borrower
- Prestige Hospitality Ventures Limited
- Lender
- Axis Bank Limited
- Liability Type
- Contingent liability
What was announced
The company informed the exchanges that it is issuing a corporate guarantee towards a loan being availed by Prestige Hospitality Ventures Limited, its wholly owned subsidiary.
Key terms
- Borrower: Prestige Hospitality Ventures Limited, a wholly owned subsidiary
- Lender: Axis Bank Limited
- Amount of facility: Up to Rs. 400 Crores
- Basis: arm's length, in compliance with the Companies Act, 2013 and the SEBI Listing Regulations
Related party angle
The company states that the promoter and promoter group do not have any interest in this transaction.
What it means for the company
A corporate guarantee means the parent agrees to step in if the borrower does not repay. The company describes this as a contingent liability — an obligation that arises only if the subsidiary defaults. Because the borrower is a wholly owned subsidiary that is already part of the consolidated group, the company states that at this point there is no impact of this guarantee on the Company.
Such guarantees are common when a subsidiary raises bank funding and the lender seeks parent support.
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More numbers
- Corporate guarantee / facility amountUp to Rs. 400 Crores
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