HFCL Extends Corporate Guarantee for Subsidiary HTL Limited, Totaling ₹265 Crores
HFCL Limited has extended a Corporate Guarantee in favor of SBICAP Trustee Company Limited, which acts for the benefit of the Working Capital Lenders of its subsidiary, HTL Limited. This new guarantee secures various fund-based and non-fund-based facilities availed or to be availed by HTL.The Company executed the guarantee through a Second Amended & Restated Deed of Corporate Guarantee. This latest arrangement substitutes an earlier Corporate Guarantee of ₹295 Crores, establishing a new guarantee limit of ₹265 Crores.
HTL Limited, a subsidiary of HFCL, is engaged in the manufacturing of Optical Fiber Cables (OFC) and providing passive connectivity solutions. Furthermore, HTL manufactures key raw materials for OFC, including Aramid Rods, Fiber Reinforced Plastic Rods, and Impregnated Glass Fiber Reinforcement. The company also provides electrical wiring interconnect solutions for the Aerospace & Defence and Automotive & Industrial sectors.
The Corporate Guarantee has been issued to secure facilities provided by multiple lending institutions. The total guaranteed amount of ₹265 Crores comprises facilities from State Bank of India (₹105 Crores), Yes Bank Limited (₹115 Crores), and Kotak Mahindra Bank Limited (₹45 Crores).
The shareholding structure of HTL remains significant to HFCL. The Company holds 74% of the paid-up share capital, with the Government of India owning the remaining 26%.
For financial reporting, the Corporate Guarantee extended in favor of SBICAP Trustee Company Limited on behalf of HTL will be disclosed as contingent liabilities in the Company’s financial statements.
The financial details of the guarantee substitution are as follows:
| Parameter | Old Guarantee | New Guarantee |
|---|---|---|
| Guaranteed Entity | HTL Limited | HTL Limited |
| Guarantor | HFCL Limited | HFCL Limited |
| Trustee/Beneficiary | SBICAP Trustee Company Limited | SBICAP Trustee Company Limited |
| Amount | ₹295 Crores | ₹265 Crores |
| Breakdown of New Amount | N/A | ₹105 Crores (SBI), ₹115 Crores (Yes Bank), ₹45 Crores (Kotak Mahindra Bank) |
HFCL Stock Price Movement
On Tuesday, HFCL Limited shares slipped by 1.25% to settle at ₹138.17, shedding ₹1.75 from its previous close. The equity found support during the session, trading across a range of ₹134.93 to ₹142.5 on an active volume of 46.89 million shares.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.