SP Group in talks with Barclays, Deutsche to raise funds

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SP Group in talks with Barclays, Deutsche to raise funds


Mumbai: Shapoorji Pallonji & Company (SPCL), the cash-strapped conglomerate controlled by the ousted Tata Sons chairman Cyrus Mistry and his family, is understood to be negotiating with a group of foreign banks including Barclays and Deutsche Bank to raise rupee loans of Rs 500-1,000 crore each, said three people with knowledge of the matter.

“The group is in talks with the foreign lenders, who are exploring a special structure with better collaterals like solar assets,” one of the persons cited above told
ET. The group is seeking short-term loan up to two years.

But, this time around, they will have to offer better collaterals as potential foreign lenders are not keen on merely real estate assets. Some of the assets include Eureka Forbes, Sterling & Wilson Solar and Afcons Infrastructure. These can either be used as strong collateral or divested.

Besides, it is said to be in talks with distressed debt specialist SSG Capital for a Rs 3,500-crore funding, which could well be through subscription of bonds that a subsidiary company of SPCL may issue. The maturity of the proposed bonds is expected to be over five years with a likely rate less than 10%. Final contours will likely be sealed within a fortnight.

“Negotiations are on to ensure a mutually beneficial arrangement for both sides. Discussions will be wrapped very soon,” said a banker close to the development.

The group is in the process of rearranging its financing, including one-time restructuring of its loans with Indian lenders.

“The proposed fundraisings may be showcased in the one-time restructuring plan that is expected to be closed soon,” said another executive involved in the process.

The SP Group did not reply to ET’s query. SSG, Deutsche, Barclays declined to comment on the matter.

Banks have referred the Rs 10,900-crore Covid-19 debt restructuring package of the Shapoorji Pallonji Group to the KV Kamath committee for final approval, ET wrote on March 29.

The recast scheme, which was sent to the committee on Friday last week, includes a two-year moratorium on principal payments and relief on interest payments for two quarters.

Bankers and investors do not expect the group to default or delay any repayment or interest payment.

“Immediate fundraisings should enable the group repaying banks’ debt. Fundamentally, the SPCL has fairly valued tangible assets,” said a senior executive. Last week, the Supreme Court verdict on Friday provided the group the freedom to pledge Tata Sons shares against loans. But, these shares have not been pledged to borrow money from banks and have no role to play in this recast plan.



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