The Shapoorji Pallonji Group on Thursday said it has settled the company's debt with a one-time payment of Rs 12,450 crore to its all 22 lenders, leaving the group's balance sheet with just Rs 3,600 crore loan.
To overcome the impact of lockdown due to COVID-19, the Mistry group had applied for a one-time loan restructuring with a group of lenders led by State Bank of India in mid-September 2020 when it had faced cash flow problems leading to a Rs 200-crore default on a commercial paper issued to the Union Bank of India.
At Rs 12,450 crore, Shapoorji Pallonji & Company's one-time settlement was the largest in the system. The group had sought two years for settling its dues but managed to come out of it within one year, said the company owned by two brothers, Shakur and Cyrus Mistry holding 50 percent stake each.
The SP Group is also the second largest shareholder of Tata Sons with 18.7 percent stake after Tata Trusts which owns over 62 per cent in the $105-billion salt-to-software conglomerate. But the over 60-year-old relationship was roiled after the Tatas sacked Cyrus Mistry from the chairmanship of the Tata Group in October 2016, much ahead of his five-year tenure, leading to a messy legal battle for years.
The repayment was enabled by the Mistry family infusing over Rs 5,100 crore into the company last year and the group collecting Rs 3,750 crore from monetising two of its marquee assets -- Sterling Wilson Renewable Energy and Eureka Forbes — last year, the statement said without explaining how the rest of the money was arranged.
However, earlier this week the group has reportedly raised Rs 4,000 crore from mortgage lender HDFC after pledging shares of Sterling Investment Corporation which owns 9.19 per cent in Tata Sons, the core holding company of the Tata Group.
An SP Group spokesman told PTI that after this debt repayment, the group has only Rs 3,600 crore of loan on its books.
The SP Group in the middle of the pandemic had tried to raise Rs 3,750 crore from Brookfield by pledging Tata group shares, but the Bombay House objected to any such arrangement, forcing the Mistrys to move the Supreme Court to get a favourable verdict.
This time it did not seek any such arrangements even though there were reports about the group doing so for Rs 15,000 crore from a Canadian private equity major.
SP Group's arm Evangelos Ventures had during the course of last year borrowed Rs 9,530 crore from affiliate companies of private equity funds Ares Capital and Farallon Capital to reduce the group's overall debt.
The Mistry group is one of the oldest engineering and construction companies with diverse interests in real estate and oil & gas. Its construction business under Afcons has an order book in excess of Rs 30,000 crore as of end-March, while its real estate franchise has achieved over Rs 4,000 crore of sales in FY22 despite the pandemic.
(With PTI inputs)
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