The debt recast request made by Shapoorji Pallonji & Company Private Limited to its lenders, led by the State Bank of India, has resulted in the lenders planning to defer principal repayments by eight quarters and suspend interest till September for the cash-strapped company, Mint reported citing documents reviewed by it.
Reportedly, a debt of Rs 22,183 crore is being considered for easier payment terms. However, the terms of the recast proposal include Shapoorji Pallonji and Co. to pay the previously agreed interest rate and fully repay the principal.
After running into trouble due to the COVID-19 pandemic disrupted the business, the company approached the lenders hoping to raise funds by pledging "through part or full monetization of its assets ( Rs 10,332 crore). Proceeds from the proposed monetization of assets would be utilized towards prepayment of loans ( Rs 9,348 crore)," showed a document reviewed by the publication, adding that a partial or full divestment of the company’s stake in Eureka Forbes Ltd, Sterling and Wilson Solar Ltd and Afcons Infrastructure Ltd is being considered in FY22.
Moneycontrol could not independently verify the report.
In 2020, Tata pegged Shapoorji Pallonji group’s 18.37 percent stake in Tata Sons at Rs 80,000 crore in the Supreme Court while the company claimed it at ₹1.75-lakh crore.
According to the report, the promoter borrowings of Rs 2,724 crore as of March 31, 2020 are expected to be converted into perpetual debt, showed the document, a letter sent by Care Ratings to SBI on February 27.
The debt recast plan has received an RP4 rating from Care Ratings, a minimum requirement under the Reserve Bank of India’s (RBI) one-time restructuring framework. Debt facilities and instruments with such a rating are considered to have a moderate degree of safety regarding timely servicing of financial obligations.
“The above rating is subject to the resolution proposal being implemented as per the terms stipulated in the information memorandum shared on behalf of State Bank of India in February 2021 and other information submitted to Care," it said.