Dixon Technologies (India) Limited has issued a guarantee for its unlisted wholly owned subsidiary, Padget Electronics Private Limited, in favour of Foxlink India Electric Private Limited. The guarantee amounts to USD 10 million.
The guarantee will become effective if Padget Electronics defaults on invoice terms with Foxlink regarding the purchase of raw materials. Dixon confirmed that the transaction is conducted on an arm’s length basis, with no other interests from the promoter group in the transaction.
While there is no immediate impact on Dixon Technologies, the guarantee will be recorded as a contingent liability in the company’s financial statements.
Disclaimer: This article is based on a regulatory filing submitted to the National Stock Exchange of India (NSE).