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Foreign lenders demand personal guarantees from Shapoorji Pallonji after SC order: Report

Reportedly, the demand for guarantees was made after the Supreme Court order set aside the December 17, 2019, NCLAT order.

March 31, 2021 / 09:41 AM IST
Cyrus Mistry (GettyImages)

Cyrus Mistry (GettyImages)

Shapoorji Pallonji (SP) has once again run into financial troubles as some foreign lenders have asked the promoters of the group, the Mistry family, to furnish personal guarantees and additional shares of group companies as collateral against loans taken by pledging a part of its stake in Tata Sons Ltd, Mint reported citing two people aware of the matter.

Reportedly, the demand for guarantees was made after the Supreme Court order set aside the December 17, 2019, NCLAT order which allowed reinstatement of Mistry as Chairman of Tata Sons and as a director on the board and dismissed appeal by the SP group, which owns an 18.37 percent stake in the salt-to-steel conglomerate.

The apex court also said it cannot adjudicate on fair compensation for Shapoorji Pallonji Group for their holding in Tata Group companies.

“Some time last year, the promoter entities of Shapoorji Pallonji Group had borrowed close to $500 million from two foreign banks by pledging a part of the stake, before the Tata group moved the Supreme Court and obtained an injunction in the matter, which barred the Mistry family from pledging further stake," said one of the people cited above.