New Delhi: Varun Beverages Ltd (VBL), one of PepsiCo’s largest franchise bottlers globally, on Tuesday said it has enhanced a corporate guarantee on behalf of its wholly owned subsidiary, Varun Beverages International DMCC, based in Dubai, United Arab Emirates.
The company has increased the guarantee amount from $27.5 million to $49.5 million in favour of ICICI Bank Ltd, acting through its DIFC branch in Dubai. The guarantee is aimed at securing credit facilities extended by the bank to the overseas subsidiary and will remain valid until June 30, 2027.
In a regulatory filing, VBL said the transaction has been carried out at arm’s length and that neither the promoter nor promoter group entities have any interest in the arrangement. The company also clarified that the enhanced guarantee will not have any material financial impact on Varun Beverages Ltd.
Varun Beverages International DMCC serves as the group’s international arm in the Middle East and plays a key role in managing overseas operations and investments. The enhancement of the guarantee indicates continued support by the parent company to fund expansion and working capital needs of its global business, even as VBL scales up capacity and distribution across multiple geographies.
Shares of Varun Beverages were trading steady in afternoon trade following the disclosure, as investors viewed the move as a routine balance-sheet support measure rather than incremental leverage at the listed entity level.