Dreamfolks Provides Guarantee for Ten 11 Hospitality’s INR 2.50 Crore Overdraft Facility
Dreamfolks Services Limited, in a move supporting its client, has approved providing security and a corporate guarantee to facilitate funding for Ten 11 Hospitality Private Limited. The commitment secures a Dropline Overdraft facility of INR 2.50 crore for the hospitality company, which is being provided by AU Small Finance Bank Ltd.The Board of Directors of Dreamfolks Services Limited sanctioned the deal, which involves offering a Letter of Guarantee and providing a Fixed Deposit of INR 1 crore as collateral. This financial support is intended to secure all associated costs, including interest, additional fees, commissions, charges, expenses, and legal costs related to the facility.
The guarantee arrangement has an initial period of one year, with provisions for auto-renewal until the loan tenure is complete. Beyond the core security, Dreamfolks Services Limited will also charge a guarantee commission to Ten 11, which will be benchmarked at the end of the financial year. The company retains the right to recover all amounts paid or liabilities incurred under the Guarantee from the borrower as per the executed agreement.
Transaction Details
The details of the corporate commitment are summarized below:| Aspect | Detail |
|---|---|
| Client Entity | Ten 11 Hospitality Private Limited (formerly known as Ten 11 Hospitality LLP) |
| Lender | AU Small Finance Bank Ltd. |
| Facility Secured | Dropline Overdraft facility of INR 2.50 crore |
| Security Provided | Letter of Guarantee and a Fixed Deposit of INR 1 crore |
| Initial Duration | One year, with auto-renewal provision |
Financial Impact Assessment
The proposed arrangement is classified as a contingent liability for Dreamfolks Services Limited and does not result in any immediate cash outflow. The company stated that based on its current financial standing, it does not foresee the invocation of the Corporate Guarantee. Apart from the temporary restriction placed on the fixed deposit used as collateral, Dreamfolks expects no material impact on its liquidity or overall financial position.DREAMFOLKS Stock Price Movement
Today, Dreamfolks Services Limited shares gained 1.56%, settling at ₹70.42 in post-market trading. The stock traded within an intraday range of ₹69.06 to ₹70.7.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
The information provided is for general informational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any securities. Readers are advised to rely on their own assessment and judgment and consult appropriate financial advisers, if required, before taking any investment-related decisions.
Any views, opinions, or statements expressed, where applicable, are those of the respective analysts or experts and do not reflect the views of this website. The website has no association with such viewpoints and does not assume any responsibility for them.