Subam Papers Limited has issued a regulatory disclosure under Regulation 30 of the SEBI Listing Obligations and Disclosure Requirements Regulations, 2015, regarding the issuance of a corporate guarantee.
The company has proposed to provide a corporate guarantee in favor of YES Bank for an amount of ₹40.00 crore. This guarantee serves as security for credit facilities in the form of a cash credit (CC) limit of ₹40.00 crore sanctioned to M/s. Subam Paper and Boards Private Limited, which is a wholly-owned subsidiary company of Subam Papers Limited.
The credit facility breakdown consists of:
- Existing Limit: ₹20.00 crore
- Fresh Limit: ₹20.00 crore
Key Details from Annexure A:
Party Beneficiary: Subam Paper and Boards Private Limited, Wholly Owned Subsidiary Company
Promoter Group Interest: The promoter/promoter group/group companies are not interested in this transaction. The corporate guarantee issued is confirmed to be at arm's length.
Terms and Conditions: Corporate Guarantee to the Lender (YES Bank) for an amount of ₹40.00 crore as security for the Credit facilities, specifically the CC Limit of ₹40.00 crore.
Financial Impact Assessment: There is no immediate impact on the Company, except to the extent of the amount for which the corporate guarantee has been provided. The impact would only materialize if Subam Paper and Boards Private Limited is unable to meet its repayment obligations to the Lender. The Corporate Guarantee constitutes a contingent liability for the Company.