Ventive Hospitality’s Board of Directors has approved providing a corporate guarantee to secure credit facilities for its subsidiary, Kudakurathu Island Resorts Private Limited. The guarantee covers up to USD 39.6 million, including an immediate guarantee of USD 12 million and a further USD 27.6 million, subject to shareholder approval. The loan will finance Kudakurathu Island Resorts’ operations.
Corporate Guarantee Approval
The Board of Directors at Ventive Hospitality has approved a proposal to secure credit facilities of USD 36,000,000 for Kudakurathu Island Resorts Private Limited, a subsidiary of the Company. This support will be provided through a corporate guarantee.
Guarantee Details
The corporate guarantee will be for an aggregate amount not exceeding USD 39,600,000, comprising:
- USD 12,000,000: This portion of the guarantee will be provided immediately.
- USD 27,600,000: This additional guarantee is subject to the approval of the shareholders of the Company via a Postal Ballot.
Subsidiary Information
Kudakurathu Island Resort Private Limited, for which the guarantee is being provided, is a subsidiary of Ventive Hospitality. The transaction has been determined to be at arm’s length. The interest rate for the loan is 3 Month SOFR + 240 bps, which will remain constant throughout the facility’s tenure.
Impact on Ventive Hospitality
There is no immediate impact on Ventive Hospitality, except to the extent of the amount for which the corporate guarantee has been provided. In the event Kudakurathu Island Resort Private Limited cannot meet its repayment obligations, the Corporate Guarantee constitutes a contingent liability for Ventive Hospitality. The facility has a term of 7 years from the first disbursement date.
Source: BSE