Samvardhana Motherson International Limited, a company with global automotive parts and solutions, has recently issued corporate guarantees worth approximately $1.1 billion to support the lenders and creditors of its wholly-owned subsidiaries. This step aims to harmonize the security structure and allow the company’s consolidated credit strength to benefit its subsidiaries.
The guarantees, issued on March 28, 2025, were made for several of the company’s subsidiaries, including Motherson Global Investments B.V., Samvardhana Motherson Automotive Systems Group B.V., SMP Automotive Systems Alabama Inc., SMR Automotive Systems USA Inc., and SMR Holding Australia Pty Limited. The guarantees have a capped potential liability, ranging from 1.05 to 1.10 times the respective facility amounts, with the longest tenure stretching until March 18, 2028.
Samvardhana Motherson emphasized that these guarantees would not impact its consolidated financial statements, as the loans are availed by its wholly-owned subsidiaries. Moreover, the company confirmed that no promoter, promoter group, or related company is involved in the transaction.
This move is significant, as it demonstrates the company’s commitment to supporting its subsidiaries and ensuring their financial stability. By issuing these guarantees, Samvardhana Motherson is able to provide a level of security and confidence to the lenders and creditors of its subsidiaries, allowing them to access capital and drive growth. Overall, this development showcases the company’s focus on long-term growth and its ability to support its subsidiaries through challenging economic times.