The corporate guarantee is to secure the due repayment of certain credit facilities to be availed by the company's subsidiary, Shipwaves Online LLC, from Abu Dhabi Commercial Bank PJSC. The aggregate value of the guarantee is up to AED 4,500,000, which is approximately equivalent to ₹116,325,000 (One Hundred Sixteen Million Three Hundred Twenty-Five Thousand only).
Interest and Arm's Length Nature
Shipwaves Online LLC is a subsidiary of the company. Mr. Kalandan Mohammed Haris, Promoter of the company, has an interest in the transaction by virtue of his investment in the subsidiary to the extent of 13% of the paid-up share capital. The corporate guarantee is proposed to be provided on terms considered to be on an arm's length basis.
Transaction Status and Impact
The relevant agreements/documents for the credit facilities and guarantee are yet to be executed. The corporate guarantee provided by the company will constitute a contingent liability to the extent of the credit facilities availed by Shipwaves Online LLC. The company will have the right to recover from the subsidiary any amount paid or obligation discharged by the company pursuant to invocation of the corporate guarantee.