Mumbai: Shapoorji Pallonji Group, which has decided to exit the Tata group, will restructure ₹10.9 billion rupees of its debt under the pandemic-related stress resolution framework, an official with the group said.
The relief is sought under the one-time loan restructuring plan approved by the Reserve Bank after it accepted the KV Kamath panel report, which allows companies in financial difficulties to consolidate their debt over two years, the official said.
“Shapoorji Pallonji Construction (SPCPL), the 150-year-old holding company of the Shapoorji Pallonji Group, wants to restructure ₹10.9 billion rupees of its debt through one-time loan restructuring under the RBI-approved COVID-19 resolution framework, “the official said. PTI on Friday.
The development comes after Tata moved the Supreme Court on September 5 to block the SP Group’s plans to pledge a portion of its 18.37 percent stake in Tata Sons, which it has been holding for the past seven decades. and has valued in more than ₹1.78 crore lakh – to increase ₹11,000 crore.
The proposed debt was to finance the group’s main construction business, which has been facing liquidity problems after the closings to help contain the coronavirus pandemic.
The Tatas moved to court a day after SP Group signed a fundraising agreement with Canadian fund Brookfield ₹3,750 crore.
By accepting Tatas ‘petition, the Supreme Court on September 22 asked both parties to maintain the status quo on the shares until October 28, when it will deliver the verdict on Tatas’ petition challenging the NCLAT to reinstate Cyrus Mistry. as president of the Tata group and at Mistry’s. petitions that seek to protect the rights of minority shareholders.
The SP Group then informed the high court that it would like to end the 70-year association with the Tatas, as mutual trust between them has been hopelessly broken.
The Mistry family owns 18.37 percent of the shares (listed and unlisted) in Tata Sons, the holding company of the Tata group.
The construction and real estate sectors, the pillar of Grupo SP, have been greatly affected by the pandemic.
Over the past two years, promoters had been infused ₹Rs 3,000 crore in the group to strengthen its balance sheet, the official said.
The Mistry family was in the process of raising ₹11 billion rupees from global investors by pledging their stake in Tata Sons.
“The fund was expected to mitigate severe stress from the pandemic, deleverage the balance sheet, and protect the livelihood of its 1.6 lakh workforce,” the official added.
But Tata Sons moved the Supreme Court to suspend the fundraising plan, which the group has denounced as “a vindictive measure aimed at creating irreparable harm to the group amid the pandemic,” the official said.
The Reserve Bank adopted on September 7 the recommendations of the KV Kamath committee that was established to draft a framework to provide relief to companies financially affected by the pandemic.
The framework provides for a two-year extension of repayment obligations subject to the fulfillment of certain conditions.
The group official further said that SPCPL’s decision to opt for a one-time loan restructuring is aimed at “safeguarding the financial interests of all stakeholders and protecting the livelihoods of its employees and contractors in these difficult times.” .
SPCPL’s flagship operating firm is Afcons, the second-largest engineering, procurement, and construction (EPC) company in the country after L&T.
SPCPL has more than 60,000 people on its rosters and more than 1 lakh of migrant workers employed at its sites around the world.
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