Sterling and Wilson Renewable Energy Limited has informed the stock exchanges about an important financial step related to its international business operations. The company made this disclosure under Regulation 30 of the SEBI Listing Regulations.
As per the filing, the company has issued a Parent Company Guarantee (PCG) to support its step-down subsidiary, Sterling and Wilson Engineering (Pty) Ltd. This guarantee has been provided to ABSA Bank Limited, which is acting as the lender. The purpose of this arrangement is to secure a non-fund-based working capital facility that will be used for solar power projects in South Africa.
The total value of the guarantee stands at USD 31 million, which is approximately INR 293.04 crore. The company has mentioned that the guarantee will remain valid for a period of six years from the date it is issued. This indicates a long-term financial commitment to support its overseas operations.
The company has clarified that the transaction has been carried out on an “arm’s length” basis. This means that it is a normal business transaction conducted without any conflict of interest. It has also been clearly stated that promoters or promoter groups do not have any personal interest in this arrangement.
From a financial perspective, the guarantee will be treated as a contingent liability for the company. This means that it is not an immediate financial burden. However, if the subsidiary fails to meet its obligations, the parent company may have to step in and fulfill the commitment.
The disclosure was signed by Chief Financial Officer Ajit Pratap Singh and submitted to both BSE Limited and the National Stock Exchange of India Limited. This move reflects the company’s continued focus on expanding its renewable energy presence in the South African market.
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