Electronic manufacturing services major Dixon Technologies (India) has issued a continuing and irrevocable corporate guarantee of USD 220 million (about ₹2,101 crore) on behalf of its subsidiary, Padget Electronics, in favour of Lenovo Ireland International Ltd. According to the company's regulatory filing, the guarantee aims to ensure that Padget Electronics discharges all its payment obligations towards Lenovo Ireland for the purchase of raw materials, parts, and components required for manufacturing its products. As per the latest regulatory filing, Dixon has agreed to provide this guarantee 'for and on behalf of Padget up to an aggregate limit of USD 220,000,000', providing comprehensive financial security for the subsidiary's operations.
Padget Electronics is described as an unlisted material wholly owned subsidiary of Dixon Technologies. As reported in the regulatory filing, there is no immediate impact on Dixon, though the guarantee will be reflected as a contingent liability in the company's books. This structure ensures Dixon remains financially protected while providing the necessary security for Padget's business operations with Lenovo Ireland.
The guarantee arrangement follows a significant manufacturing contract awarded to Padget Electronics in December 2023. According to the company's regulatory filing, Padget was awarded a manufacturing contract by Lenovo for manufacturing of IT hardware products, specifically laptops and notebooks, under the Production Linked Incentive 2.0 Scheme. This contract establishes Padget's role as a key manufacturing partner for Lenovo's hardware production in India, with the guarantee providing essential financial backing for this strategic partnership.
