HFCL Limited announced that it has issued a Corporate Guarantee on behalf of its subsidiary, HTL Limited, to secure a rupee term loan facility from Axis Finance Limited. The total commitment under this guarantee amounts to ₹30 Crore. HTL, in which HFCL holds a 74% stake, manufactures Optical Fiber Cables and related solutions. The guarantee is confirmed to be executed on an arm’s length basis.
Corporate Guarantee for Subsidiary Funding
HFCL Limited has officially informed stakeholders regarding the issuance of a significant Corporate Guarantee in favor of Axis Finance Limited. This guarantee is intended to secure a rupee term loan facility that has been or will be availed by HTL Limited, a key subsidiary of HFCL.
The maximum extent of the guarantee provided by HFCL is capped at Rs. 30 Crore.
Subsidiary Profile and Shareholding
HTL Limited is a crucial component of HFCL’s operations, specializing in the manufacturing of Optical Fiber Cables (OFC) and providing passive connectivity solutions. Furthermore, HTL produces essential raw materials like Aramid Rods and also offers electrical wiring interconnect solutions for specialized sectors including Aerospace & Defence.
HFCL maintains a substantial ownership in HTL, holding 74% of the paid-up share capital. The remaining 26% of the equity is held by the Government of India.
Transaction Details and Disclosure
The required disclosures confirm that there is no interest in this transaction from the promoter/promoter group of HFCL, beyond the existing shareholding relationship within the subsidiary. Critically, the Corporate Guarantee has been structured and given on an arm’s length basis, indicating fair commercial terms.
The financial impact of this commitment is that the Corporate Guarantee will be recorded and disclosed as a contingent liability in the consolidated financial statements of HFCL Limited.
Source: BSE
