Finolex Cables has provided a corporate guarantee of ₹39.2 crore to ICICI Bank Limited on behalf of its joint venture company, Finolex J Power Systems Limited (FJPSL), to support their working capital requirements. This guarantee is part of a larger arrangement involving Sumitomo Electric Industries, with risk sharing based on shareholding. The move aims to facilitate FJPSL’s operations.
Corporate Guarantee for Associate Company
Finolex Cables Limited has extended a corporate guarantee in favor of ICICI Bank Limited for Finolex J Power Systems Limited (FJPSL). FJPSL, a joint venture company, is receiving support to manage its working capital facilities.
Guarantee Details
The total value of the working capital facility is estimated at ₹80 crore. Finolex Cables’ share of the corporate guarantee amounts to ₹39.2 crore. This arrangement is unconditional and irrevocable.
Risk Sharing Arrangement
The guarantee is part of an arrangement between Sumitomo Electric Industries (SEI) and Finolex Cables, where risks are shared based on their respective shareholdings in FJPSL: 51% by SEI and 49% by Finolex Cables. A Memorandum of Understanding (MOU) formalizes this risk-sharing agreement. The arrangement was put in place on July 27, 2023.
Source: BSE