Mukka Proteins to provide ₹735.83 crore guarantee for subsidiary's credit facilities
Mukka Proteins' Board approved providing a corporate guarantee, SBLC, and fixed deposit for its subsidiary, United Gulf Fishery Products LLC. This secures credit facilities up to ₹735.83 crore from HDFC Bank. The guarantee constitutes a contingent liability for Mukka Proteins.
The approval of a corporate guarantee and SBLC for a significant amount (₹735.83 crore) introduces a contingent liability that could impact the company's financial standing if the subsidiary defaults. However, the ability to recover from the subsidiary and the arm's length terms moderate the immediate impact.
The provision of a corporate guarantee and SBLC for a subsidiary's debt is a standard financial arrangement. While it secures funding for the subsidiary, it also introduces a contingent liability for the parent company. The terms are stated to be at arm's length, and the company can recover amounts paid from the subsidiary, mitigating direct risk.
Mukka Proteins Limited announced that its Board of Directors, in a meeting held on October 9, 2026, approved the provision of a corporate guarantee, Standby Letter of Credit (SBLC), and security via fixed deposit.
These financial instruments are intended to secure the repayment of credit facilities that will be availed by United Gulf Fishery Products LLC, an Oman-based subsidiary of Mukka Proteins, from HDFC Bank Limited. The aggregate value of these facilities is up to ₹735,830,000 (Seven Hundred Thirty-Five Million Eight Hundred Thirty Thousand Rupees), which is equivalent to ₹735.83 crore.
The company has confirmed that United Gulf Fishery Products LLC is a subsidiary, and Mukka Proteins has an interest in the transaction due to its investment. The terms are considered to be at arm's length, and the promoter/promoter group has no direct interest other than through their interest in Mukka Proteins. The corporate guarantee and SBLC will represent a contingent liability for Mukka Proteins, but the company retains the right to recover any amounts paid from the subsidiary. The relevant agreements are yet to be executed. The Board meeting commenced at 3:06 p.m. and concluded at 3:20 p.m.
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Mukka Proteins Limited filed this with the NSE as a statutory disclosure, categorised under other corporate actions. It is a primary document, not a recommendation, and the desk marks it medium impact: worth reading, rarely worth acting on by itself.
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