HFCL Limited announced today the issuance of Corporate Guarantees on behalf of its subsidiary, HTL Limited, totaling up to ₹50 Crore. These guarantees are intended to secure term loan and working capital facilities availed by HTL from the SBICAP Trustee Company Limited. HFCL holds a 74% stake in HTL, which specializes in manufacturing Optical Fiber Cables (OFC). The transaction has been confirmed to be executed on an ‘arm’s length’ basis.
Corporate Guarantee Issued for Subsidiary HTL
HFCL Limited has confirmed the provision of Corporate Guarantees in favour of SBICAP Trustee Company Limited. This action is designed to secure financial facilities being provided to HTL Limited, which is a subsidiary of HFCL. The guarantees cover both term loan and fund-based working capital facilities.
Financial Commitment Details
The total commitment under the Corporate Guarantees is up to Rs. 50 Crore. This amount is specifically allocated to secure:
- Term Loan facility amounting to Rs. 40 Crore.
- Working Capital facility amounting to Rs. 10 Crore.
These facilities are being provided by the State Bank of India, with SBICAP Trustee Company acting as the Security Trustee.
Subsidiary Profile and Ownership
HTL Limited is primarily engaged in the manufacturing of Optical Fiber Cables (OFC) and providing passive connectivity solutions. HFCL currently holds a 74% paid-up share capital in HTL, with the remaining 26% held by the Government of India. HTL also manufactures key raw materials for OFC, such as Aramid Rods and specialty reinforcement materials, catering to Aerospace & Defence and Automotive sectors.
Transaction Nature and Disclosure
The announcement confirms that the issuance of these Corporate Guarantees was executed on an ‘arm’s length’ basis. No interests other than the existing shareholding interest of HFCL in HTL were noted in this specific transaction.
HFCL further clarified the financial impact on the listed entity: the value of these Corporate Guarantees given in favour of the SBICAP Trustee Company Limited will be disclosed as contingent liabilities in the financial statements of HFCL Limited.
Source: BSE
