Worth Peripherals Extends Guarantee for Joint Venture's ₹1 Crore Working Capital Facility
Worth Peripherals Limited is extending a Co-Obligancy (Guarantee) of ₹1 Crore for its Joint Venture, M/s Yash Packers. This supports the renewal of Yash Packers' working capital facility from Federal Bank for 12 months at 8.30% interest. The guarantee is a contingent liability with no immediate impact on the company.
Providing a guarantee, even if contingent, for a significant amount like ₹1 Crore for a joint venture can have an impact on the company's financial standing and risk profile, warranting a medium impact assessment.
The company is providing a guarantee for its joint venture's working capital facility. While this represents a contingent liability, the announcement states there is no immediate impact on the company, making the sentiment neutral.
Worth Peripherals Limited has announced the extension of its Co-Obligancy (Guarantee) for its Joint Venture, M/s Yash Packers. This guarantee is in support of the renewal of Yash Packers' working capital (Cash Credit) facility amounting to ₹1,00,00,000 (Rupees One Crore only).
The facility has been sanctioned by Federal Bank and is valid for a period of 12 months. The terms include an interest rate of 8.30% per annum and a 25% margin on stock and book debts. The company has confirmed that the transaction is conducted on an arm's length basis and that none of its promoters, promoter group, or directors have any interest in this transaction.
The Co-Obligancy (Guarantee) represents a contingent liability for Worth Peripherals Limited. However, the company states that at this point, there is no direct impact on the company, as the guarantee is provided on behalf of the Joint Venture, which is part of the consolidated group.
A plain-language summary of a public exchange filing by Worth Peripherals Limited. Read the original for the full detail.