The Shapoorji Pallonji (SP) group is set to present its terms of agreement to the Supreme Court (SC) on Tuesday. This will eventually see the departure of the cash-strapped Pallonji Group from Tata Sons.
With this, the hearing in the Tata versus Mistry case is likely to be postponed to next month, a source close to the development said. “The agreement between the Tata Group and SP Group is good news for both parties. The negotiations will now advance towards the valuation of the 18.4 percent stake in Tata Sons, ”clarified a source.
The Mistrys have set the valuation of their stake in Tata Sons at 1.78 trillion rupees, while the Tata Group set the valuation much lower. “There is a possibility that independent appraisers from Tata Sons will be appointed with the consent of the CS,” the source said.
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On October 10, the Tata Group had said that it had not received any formal request or proposal from SP Group regarding the deal and said it would wait for court proceedings to resume on October 28. “With the deadline approaching, SP Group will present its agreement. plans, offering their settlement terms, “added the source.
The deal is important to SP Group, which has faced an unprecedented cash crisis due to the slowdown in construction and the real estate sector. Group companies, which have begun to default on loans, have applied for debt relief with their lenders, taking advantage of the Reserve Bank of India’s rules on one-time debt restructuring.
The group failed to raise funds from Canadian financial giant Brookfield by pledging shares in Tata Sons after the latter moved SC blocking the pledging of Tata Sons shares. Tata Sons moved to court on September 5, a day after SP Group signed an agreement with Brookfield to collect Rs 3,750 crore as debt.
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Subsequently, SP Group informed the SC that it would separate from the Tata Group, ending its 70-year relationship with the conglomerate. SP Group said it would exit Tata Sons as long as it had an early, fair and equitable solution.
The Mistrys said a separation from the Tata Group was necessary due to the potential impact this litigation could have on the livelihoods of their employees and the economy. “It was crucial that an early resolution be reached to reach a fair and equitable solution that reflected the value of the underlying tangible and intangible assets,” the SP Group statement read.
As the largest minority shareholder, a role previously played by SP Group has always been one of guardianship with the aim of protecting the best interests of the Tata Group. SP Group had always used its voting rights as a shareholder in the best interests of the Tata Group, he said.
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