Shapoorji Pallonji Group says offering PFC 6x collateral for the loan

Some independent directors of the state-owned lender had raised concerns about the proposal.

The Shapoorji Pallonji Group has said it will provide security cover six times the value of the loan it will take from Power Finance Corporation (PFC).

“We are pleased to collaborate with PFC on this distinctive arrangement, which combines the strength of our extensive real estate assets with a portion of Tata Sons shares held by the Mistry family,” Venkatesh Gopalakrishnan, director, group promoters office, Shapoorji Pallonji, said in a statement issued late on August 6.

The statement comes amid reports questioning the adequacy of the security provided for the Rs 15,000 crore loan. According to reports, the loan is  yet to be disbursed.

“This dual security structure ensures a collateral value exceeding six times the loan amount. Additionally, the cash flows from our real estate holdings will facilitate full repayment of the loan over its term,” Gopalakrishnan said.

Billionaire Shapoor Mistry-led group also said it received the sanction letter after the PFC board formally approved the loan on June 14.

The PFC board had in June approved a Rs 15,000-crore loan to the Shapoorji Pallonji Group. This loan would assist the Mistry family, who hold an 18.37 percent stake in Tata Sons, in repaying promoter debts and fulfilling commitments to creditors, reports said.