SP Group raise $1.75 billion in support of Tata
The Shapoorji Pallonji (SP) Group, the largest shareholder of Tata Sons, is in discussions to raise $1.75 billion by pledging the remaining half of its stock in the unlisted holding company of the Tata Group. According to them, The SP Group is seeking to inject capital into its running companies and repay a portion of its financial commitments.
A little under 9% of the group's 18.37% share in Tata Sons has already been committed. The entire shareholding, which is currently worth close to 94,000 crore, will be committed to lenders following this most recent transaction, including two foreign banks and numerous foreign hedge and credit firms. The Mistry family business Cyrus Investment Pvt Ltd (CIPL) would raise the zero-coupon payment-in-kind (PIK) loan, which will be returned at a pre-determined value at maturity, which is anticipated to be in the range of three years.
One of the people stated, "The group has picked Standard Chartered Bank (SCB) and Deutsche Bank (DB) to syndicate the loan. Both of these institutions are its long-term relationship banks. Several lenders are in discussions to join the transaction, in addition to SCB and DB. The Ontario Municipal Employees Retirement System (OMERS), a Canadian public pension fund, and overseas hedge funds Cerberus Capital Management, Ares SSG, Oaktree Capital, and Davidson Kempner Capital Management are among them, the source claimed. Inquiries were not answered by The SP Group, Cerberus Capital, or Davidson Kempner. OMERS, Oaktree, SCB, DB, and Ares SSG all declined to comment.
"With this, the total value of the loans raised by Mistry family-held entities against shares of Tata Sons will exceed $3 billion," said a second person. "The group has already raised around $1.6 billion from various lenders from 2021 onwards and it has repayments maturing to the tune of $750 million by end of current year." According to bankers privy to the ongoing talks, the SP Group, which is largely privately held by the Mistry family, will use part of the funds to infuse cash in its operating companies.
These will be made profitable by selling stakes to financial and strategic investors as well as by being listed on public markets. The SP Group, one of India's oldest diversified industrial conglomerates and founded by Pallonji Mistry in 1865, operates in a number of industries, including real estate, construction, infrastructure, solar power production, and related services for the oil and gas industry.
To optimise operating cash flows, the group recently established parallel holding entities for its real estate and infrastructure divisions. After the late Cyrus Mistry was fired as chairman of Tata Sons in 2016, the group's relationships with the Tata Group deteriorated. The Tata Group won the contentious legal struggle between the two sides.
A little under 9% of the group's 18.37% share in Tata Sons has already been committed. The entire shareholding, which is currently worth close to 94,000 crore, will be committed to lenders following this most recent transaction, including two foreign banks and numerous foreign hedge and credit firms. The Mistry family business Cyrus Investment Pvt Ltd (CIPL) would raise the zero-coupon payment-in-kind (PIK) loan, which will be returned at a pre-determined value at maturity, which is anticipated to be in the range of three years.
One of the people stated, "The group has picked Standard Chartered Bank (SCB) and Deutsche Bank (DB) to syndicate the loan. Both of these institutions are its long-term relationship banks. Several lenders are in discussions to join the transaction, in addition to SCB and DB. The Ontario Municipal Employees Retirement System (OMERS), a Canadian public pension fund, and overseas hedge funds Cerberus Capital Management, Ares SSG, Oaktree Capital, and Davidson Kempner Capital Management are among them, the source claimed. Inquiries were not answered by The SP Group, Cerberus Capital, or Davidson Kempner. OMERS, Oaktree, SCB, DB, and Ares SSG all declined to comment.
"With this, the total value of the loans raised by Mistry family-held entities against shares of Tata Sons will exceed $3 billion," said a second person. "The group has already raised around $1.6 billion from various lenders from 2021 onwards and it has repayments maturing to the tune of $750 million by end of current year." According to bankers privy to the ongoing talks, the SP Group, which is largely privately held by the Mistry family, will use part of the funds to infuse cash in its operating companies.
These will be made profitable by selling stakes to financial and strategic investors as well as by being listed on public markets. The SP Group, one of India's oldest diversified industrial conglomerates and founded by Pallonji Mistry in 1865, operates in a number of industries, including real estate, construction, infrastructure, solar power production, and related services for the oil and gas industry.
To optimise operating cash flows, the group recently established parallel holding entities for its real estate and infrastructure divisions. After the late Cyrus Mistry was fired as chairman of Tata Sons in 2016, the group's relationships with the Tata Group deteriorated. The Tata Group won the contentious legal struggle between the two sides.
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