LETTER OF COMFORT
…………………………. Co. Ltd.
………………………….
………………………….
TO Date:
………………………….
………………………….Bank,
………………………….Branch,
Dear Sirs,
Grant of loan of Rs ………………………….to A B Co. Ltd …………………………..
We have to inform you that A B Co. Ltd. a company incorporated under Companies Act, 1956 and having its registered office at………………………….hereinafter referred to as the said company, is our subsidiary company and we hold………………………….% equity share holding in the said company and we have no intention to withdraw support from the said company.
2. We understand that you have granted a loan of Rs ………………………….to the said company for its business purposes and desired to have a letter of guarantee or comfort from us.
3. In consideration of your grant of an advance of Rs ………………………….to the said company, we will ensure that during the period, the said advance is not repaid, the financial position of said company will be good to meet its obligations and in case the said company fails to repay the advance together with interest, costs and charges, we will see that the liability of the said company is liquidated.
4. This letter is merely a letter of comfort and should not be treated as a letter of guarantee guaranteeing the debts and liabilities of the said company.
Yours faithfully,
For………………………..Co. Ltd
Managing Director