Tata Sons and SP Group
Shapoorji Pallonji Group has to repay the loan of about 1.2 billion dollars i.e. about Rs 10,000 crore by December. For this, the group has pledged its entire stake in Tata Sons, a little more than 18%. According to sources, the group has refinanced the already taken loan of $3.2 billion, but now the challenge is to repay both the principal and interest in two months. The Mistry family has promoter level debt of Rs 25,000-30,000 crore, which is almost half of the group’s total debt of Rs 55,000-60,000 crore. It may be difficult to raise so much money, which may create problems in talks with Tata Sons to sell their stake.
Tata Sons Sahara
Difficulties in pledging Tata Sons shares: Sources said lenders may seek clear information from SP Group about its plans to sell more securities or assets. This loan is based on the shares of Tata Sons and other assets of SP Group. But Tata Sons shares are non-listed, which means it is not easy to sell them in the open market. It is not possible to sell them to an outside buyer without the permission of Tata Group. Till now Tata Group has not made any offer to SP Group to sell its stake or exit. SP Group did not even get answers to the questions asked in this regard.
Listing will provide relief
SP Group believes that if Tata Sons is listed in the stock market, it will be the best and transparent path for all the shareholders. With this, SP Group can sell its stake in the open market at a good price. Besides, there will be benefit in tax matters also. Selling through listing will attract only 12% capital gains tax, whereas Tata Sons will have to pay 36% tax on buying back the stake.
Debt Accounting Sterling Investments Private Limited, the promoter company of SP Group, had taken a loan of $ 2.6 billion from Ares Management and Fairlawn Capital in 2021 for 3.5 years. This company has a little more than 9% stake in Tata Sons. Earlier this year, SP Group refinanced $3.2 billion of debt, with Davidson Kempner and Cerberus Capital taking the lead, and Ares and Fairlawn also rolling over portions.
Difficulties for SP group
The group also tried to take a loan from Power Finance Corporation (PFC) at low interest, but PFC did not approve it for unknown reasons. Earlier, Moneycontrol had reported that Goswami Infratech, another company of SP Group, had repaid the loan of Rs 14,300 crore by selling the IPO of Afcons Infrastructure and stake in Gopalpur Port to Adani Group. Overall, SP Group faces a big challenge in repaying its debt and selling the stake of Tata Sons is not easy. If Tata Sons becomes a listed company, then things can be resolved, but right now it is just a hope.