Shapoorji Pallonji Group seeks $1.2 billion loan from Power Finance Corp

As collateral for the initial loan, the SP Group pledged its 18 per cent stake in Tata Sons, the holding company of the Tata Group, according to reports

Shapoorji Pallonji (SP) Group has initiated discussions with Power Finance Corporation (PFC) to secure up to $1.2 billion for refinancing a portion of the Rs 20,000 crore debt set to mature in the final week of May, Moneycontrol reported, citing sources.

These talks have been ongoing for several weeks. As collateral for the initial loan, the SP Group pledged its 18 per cent stake in Tata Sons, the holding company of the Tata Group, the report claimed.

Corporate filings by the SP Group indicated that the funds were initially raised by the Mistry family through Sterling Investment Corp. Pvt Ltd (SICPL), which owns slightly over 9 per cent of Tata Sons. Reportedly, these bonds, maturing in 3.5 years and issued in 2021, were mainly subscribed by alternative investment manager Ares SSG and hedge fund Farallon Capital.

Business Standard could not independently verify the report.

PFC, established in 1986, initially focused on developing India's power sector, exclusively lending to state-run entities until 1996. It later expanded its scope to include private-sector power utilities and projects, and recently, it extended its mandate to lend to non-power sector borrowers.

Last June, a SP Group entity, Goswami Infratech, raised Rs 14,300 crore through rupee-denominated zero-coupon non-convertible debentures (NCDs) from various investors, including Cerberus Capital, Varde Partners, Canyon Capital, Davidson Kempner, and existing lenders Deutsche Bank, Edelweiss Special Opportunities Fund, and Ares SSG, the report added. SP Group was also negotiating with existing lenders to defer a significant portion of the debt to a later date.

On March 26, SP Group announced an agreement with Adani Ports and Special Economic Zone to sell a 95 per cent stake in Gopalpur Port in Odisha for Rs 1,349 crore. Adani Ports will acquire 56 per cent from the SP Group and 39 per cent from Orissa Stevedores, fulfilling a crucial clause of its loan agreement regarding the sale of Gopalpur within an agreed timeframe.

Earlier in March, Afcons Infrastructure Ltd (AIL), the flagship infrastructure engineering and construction company of the Shapoorji Pallonji Group, filed draft papers with markets regulator Sebi to raise Rs 7,000 crore through an initial public offering (IPO).

The IPO included a combination of a fresh issue of shares worth Rs 1,250 crore and an offer for sale (OFS) of up to Rs 5,750 crore by promoter Goswami Infratech Private Limited. The offer also included a reservation for subscriptions by eligible employees, as per the draft red herring prospectus (DRHP).

Founded in 1865, the Shapoorji Pallonji Group (SP Group) is a diversified institution with a significant presence in engineering & construction, infrastructure, real estate, water, energy, and financial services sectors globally. The group's companies undertake large-scale projects, develop iconic landmarks, and pioneer innovative technologies in water management, renewable energy, oil & gas, and power.