On June 20, 2024, HFCL Limited issued a corporate guarantee in favour of Axis Finance Limited to secure a rupee term loan of ₹60 crore that HTL Limited has availed of/will avail of.
This guarantee is detailed in an agreement outlining its significant terms and conditions, primarily concerning the amount guaranteed and the obligations of the parties involved. Regarding its impact on the listed entity, the Corporate Guarantee provided on behalf of HTL will be disclosed as contingent liabilities in the Company’s financial statements. This disclosure ensures transparency regarding potential financial obligations arising from this guarantee arrangement.
HTL Limited is a subsidiary of HFCL Limited, with 74% of its paid-up share capital owned by them and the remaining 26% by the Government of India. HTL is primarily involved in manufacturing Optical Fiber Cables (OFC) and providing passive connectivity solutions.
Additionally, HTL manufactures essential raw materials for OFCs, such as Aramid Rods, Fiber-Reinforced Plastic Rods, and Impregnated Glass Fiber Reinforcement. HFCL Limited also supplies electrical wiring interconnect solutions to the Aerospace, defence, automotive, and industrial sectors.
This Corporate Guarantee underscores HFCL Limited’s commitment to supporting HTL’s strategic initiatives and operational growth. It is provided on an arm’s length basis.
Recently, HFCL, a technology company specialising in high-end telecom equipment, optical fibre, and optical fibre cables (OFC), announced on 17 June 2024 that it is the only Indian manufacturer exempted from anti-dumping duties by the European Commission. This decision came after the Commission imposed a provisional anti-dumping duty of 9.9% on other Indian OFC manufacturers like Apar Industries and Polycab India. In June 2024, the Commission concluded that HFCL had not engaged in dumping practices, leading to the exemption from anti-dumping duties.
HFCL Ltd, or Himachal Futuristic Communications Limited, is a versatile company involved in developing telecom infrastructure, system integration, and manufacturing and supplying advanced telecom equipment, Optical Fiber, and Optic Fiber Cable (OFC).
On June 21, 2024, HFCL Ltd’s share price opened at ₹124.02, touching the day’s high price of ₹125.50 as of 12:18 PM on the NSE.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
Published on: Jun 21, 2024, 4:21 PM IST
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