The Shapoorji Pallonji (SP) Group promoters are reportedly all set to raise Rs5000 crore from two special situation financiers, Ares SSG and US hedge fund Farallon Capital. The almost bail-out-like-advancement will help the SP Group meet their immediate liquidity concerns.
The official announcement is expected to be made within the next 7-10 days as the term sheet for the deal has already been signed, The Economic Times reported.
After the approval of lenders and the Kamath Committee on Tuesday, the financing round is said to be independent of the One-Time Restructuring (OTR) proposal of the real estate, construction and engineering conglomerate.
As part of structuring, a separate SPV is being created where the funds will be allocated. The funding will be carried out in the form of 3-5 year Non-Convertible Debentures (NCDs). However, this structured funding system by the two financers for SP Group will be against the “value of Tata Sons holding.”
Sterling Investments and Cyrus Investments, the two Mistry family holding companies that each hold 9.18 per cent of shares of Tata Sons, will, in turn, give guarantees to these entities against the Tata Sons shares.
This structure has been set up in order to avoid any chance of future litigation by the Tata Group over share pledges, ET sources said. Earlier, the Tata Group had gone to the court to oppose a similar approach by the Mistry family. The Tata Group intended to rescind the Mistry family from pledging its share to raise funds from third-party sources like Brookfield.
The two Mistry family entities, Sterling Investments and Cyrus Investments are Core Investment Companies (CICs) are governed under the guidelines of the RBI. They are allowed to borrow money but have to maintain a prescribed debt: equity ratio.
“The questions are speculative and based on incorrect data. The company does not comment on its financial plans including that of related to the OTR,” An SP Group spokesperson said in response to a detailed questionnaire sent by ET.
