Corporate Guarantee: Fill & Download for Free

Frankly speaking, almost a year ago, I removed Reliance Communications from my thought process as an investment opportunity, forever. On 29th Dec 2017, while writing an answer[1][1][1][1] on the company’s future, I concluded by saying that:So long term prospects for the company don’t sound lucrative!Now coming to short term, it is important to understand the issue at hand.To pare down its large debt of Rs. 46,000 cr., Reliance Communications (Rel Comm) made a deal for spectrum sale to Reliance Jio, which requires a No Objection Cetificate (NoC) from the Department of Telecommunications (DoT)However, Rel Comm owes the DoT Rs. 2,947.68 cr. as part of spectrum dues[2] . For that purpose, Rel Comm offered Rs. 3000 cr. worth of land parcel in lieu of bank guarantee and informed that, they will pay the money once the deal with Reliance Jio goes through successfully.DoT very clearly refused to take the land parcel and insisted only on bank guarantees and even told Reliance Jio to furnish these guarantees on behalf of RCom, which I believe didn’t happen.Now, SC has passed an order asking Rel Comm to furnish a corporate guarantee of Rs. 1400 cr. within two days to get the NOC and informed DoT to give its NOC for the spectrum sale within one week.This is only a minor relief.The corporate guarantee will have to be issued by Reliance Realty Ltd[3][3][3][3] , a wholly-owned subsidiary of RCom. I am not sure/aware of their capacity to do the same.DoT had remained firm on its stand that it would require a bank guarantee of Rs. 2947.68 cr. from RCom or RJio before it could allow spectrum sale.At the same time, the due date for payment of dues to Ericsson[4][4][4][4] is also coming up. By 15th Dec, Rel Comm has to pay an amount of Rs. 550 cr. along with a simple interest of 12% on the principal amount, for each day’s delay beyond 30th Sep. This is also a SC order and if missed, will have its own repercussions.Rel Comm did rally today on the back of the SC order, but I am not sure if everything will go through smoothly.However, blood is thicker than water and Mukesh Ambani might offer to give Corp. guarantees for the balance amount, incase DoT insists again for giving NoC.There is no clear way forward and for all we know, the stock might drop down.I would like to share that, some readers informed me earlier that the land monetization will make everything ‘good’ again for Rel Comm. It has been almost 1 year since my previous answer and I mentioned that it is not going to happen soon. The stock has dropped by 60% in this time.Why to take risk on such doubtful issues - which may or may not be resolved. Do remember the 15th Dec 2018 due date. Is Rel Comm ready to pay that money?Incase you are interested in risking money on penny stocks, there are quite a few good and bad, which I can share for your information.Penny stocks which have given good returns over the last 1 year. Maybe they have more steam to become small cap stocks over the course of the future.Stocks which have become ‘penny’ during the last 1 year. Most of them are not worth even a second look, but incase you can find a ‘gem’ in them, then you can make a lot of money.Also remember the ‘Hypothesis[5][5][5][5]’ that I had put forward while writing the answer Gopal Kavalireddi's answer to What's a good sign that a stock market correction is over? where I said that,I am waiting for it to happen. Large cap indices have moved in Nov and have lessened the long term ratio. I think the mid, small caps can see that upmove if there is a little more positive sentiment in the market (The Q2 GDP is only 7.1% vs. estimate of 7.4% and Q1 GDP of 8.2%). Normally, FII’s don’t participate in Dec but they might come back strongly in Jan 2019.I am keeping sufficient cash ready to buy into the small and midcaps at short notice.In the meantime, I would say a big NO-NO to Reliance Communications, even if means losing an opportunity to make money in the very short term.Financial data and source credits: Moneycontrol, Equitymaster, Financial Express, Telecomtalk, Economic Times, Business Standard articles along with trading view chart.Footnotes[1] Gopal Kavalireddi's answer to What is Gopal Kavalireddi's view on Reliance Communications stock with the recent announcements on debt reduction?[1] Gopal Kavalireddi's answer to What is Gopal Kavalireddi's view on Reliance Communications stock with the recent announcements on debt reduction?[1] Gopal Kavalireddi's answer to What is Gopal Kavalireddi's view on Reliance Communications stock with the recent announcements on debt reduction?[1] Gopal Kavalireddi's answer to What is Gopal Kavalireddi's view on Reliance Communications stock with the recent announcements on debt reduction?[2] RCom and Jio Spectrum Trading Deal in Jeopardy as DoT Refuses to Accept Land Parcel as Security[3] SC asks RCom for Rs 14-bn guarantee, clears path for spectrum sale to Jio[3] SC asks RCom for Rs 14-bn guarantee, clears path for spectrum sale to Jio[3] SC asks RCom for Rs 14-bn guarantee, clears path for spectrum sale to Jio[3] SC asks RCom for Rs 14-bn guarantee, clears path for spectrum sale to Jio[4] Supreme Court grants Reliance Communications till Dec 15 to pay Ericsson[4] Supreme Court grants Reliance Communications till Dec 15 to pay Ericsson[4] Supreme Court grants Reliance Communications till Dec 15 to pay Ericsson[4] Supreme Court grants Reliance Communications till Dec 15 to pay Ericsson[5] Gopal Kavalireddi's answer to What's a good sign that a stock market correction is over?[5] Gopal Kavalireddi's answer to What's a good sign that a stock market correction is over?[5] Gopal Kavalireddi's answer to What's a good sign that a stock market correction is over?[5] Gopal Kavalireddi's answer to What's a good sign that a stock market correction is over?

A corporate guarantee means the company is standing behind the contract, and guaranteeing performance.A financial guarantee means that whoever ( corporation or individual) is indemnifying (guaranteeing) the financial performance of the contract.A corporate guarantee could be a financial guarantee, or another sort of guarantee, such as a performance guarantee.A financial guarantee could be a corporate guarantee or an individual guarantee.

This will sound very unusual and too good to be true but you can look me up and verify it as much as you want:I focus mainly on single tenant commercial properties (stand alone buildings that can accommodate Jamba Juice, Starbucks, subway etc)I put the property under contract for approximately 45 days for due diligence (no obligation to buy)I contact as many National brand tenants and give them info on the locationI get one interested and I negotiate turn receive a LOI (letter of intent from them to lease)The LOI from a national tenant that wishes to occupy a property like this is usually for 10 yrs (sometimes 15 yrs) with their corporate guarantee and the basic terms of NNN (where the Tenant pays the property taxes, insurance and maintenance). All this makes the property value go way higher than my contract to purchase when the property was vacant (example: property under contract vacant for $600k. Once I have the national Tenant’s LOI paying X for so many years with the corporate guarantee etc the value jumps way higher based on the expected income and that same property could easily become worth around $1mil now)This is when I buy the property either all cash or with with a loan. then I sign with the tenant and refinance within 90 days to get all my money back outThis gives me 100% loan on the original purchase price (in the example I have here, it would be a $600k loan) while the property gets valued at $1mil or soThe cash flow is positive (interest rates are low and rental income is higher) with no management or other expenses (retail tenants pay almost all associated expenses)I reinvest doing the same thing over and overThis strategy made me a lot of money through the years and I even improved on it a bit by buying mixed use properties where the upstairs could be used for office or residential which added to my cash flowI even set up my own real estate funds and syndications over 10 years ago (started that in early 2009) and I trained people to identify these buildings and partner with me all over the US and once they follow my direction to line up a national tenant they assign the deals to me for huge profits to them (see success stories on YouTube)I want to be clear that those who do it with me do not have to use any of their money to buy the property: I give them the proof of funds, the tenant lists of over 4000 national brands, the script to know what to say to the tenants, and the support to close these tenants. I actually get on the conference calls with the tenants they lined up and I negotiate the terms of the LOI and then they get paid through escrow when we close the deal within 45–60 daysBtw if I or any of my students who Joint Venture with me on deals like this fail to get an national tenant interested in the location within 44 days we simply cancel the contract and walk away with zero risk (whatever earnest money deposit that was placed in escrow is fully refunded)This is how I buy and hold long term cash flowing properties with: a) instant increase in value, b) no management headaches, c) automatic increase in rent of 3% per year, d) corporate guarantee, e) infinite rates of returns (since I get to refinance and cash out all my money within 90 days). The key thing is all the work is done before I commit to buying and tenants must commit to leasing the property or I simply don’t buy itI ended up even becoming the largest owner of historic retail and mixed use properties in Old San Juan, Puerto Rico even though I was based in CA and I continue to grow nationwide doing it with others through my real estate fundHope this gives you an idea of how you can go from zero to millions in net worth and received huge cash flow income in relatively a short period of time with no hassles and low to no risk (you can do the same and even grow with your own fund duplicating this strategy and system)Good luck to you in your buy and hold endeavors