Shapoorji Pallonji raises fundraising target to $3.25 billion to refinance debt

Deutsche Bank has been conducting roadshows with potential investors.

The Shapoorji Pallonji (SP) Group has raised its fundraising target to $3.25 billion from $2.6 billion to refinance maturing debt and reduce borrowing costs. The group aims to extend the loan maturity of debt raised by its Goswami Infratech unit in 2023, pay upcoming maturities, and prepay debts to Ares and Farallon, reported The Economics Time.

As per the term sheets circulated among potential investors, the fundraising is managed by Deutsche Bank and structured as a five-year facility comprising non-convertible debentures (NCDs) with an expected yield of about 18%. Reports indicate that 75% of the target has already been committed by investors.

Previously, in June 2023, the group had a fundraising round that included a put option for December 2025, where NCDs were placed privately and later listed on the BSE. In 2021, SP Group's promoter, Sterling Investments Pvt Ltd, secured $2.6 billion from Ares SSG and Farallon by pledging a 9.1% stake in Tata Sons. These high-cost NCDs, priced below 20%, are set to mature in March 2025, necessitating refinancing efforts.

Proceeds from the current round will also refinance Goswami Infratech’s June 2023 debt backed by a 9.1% Tata Sons stake held by Cyrus Investments Pvt Ltd. This debt, maturing in April 2026, attracted global investors like Cerberus, Ares, and Deutsche Bank.

Additional funds will also assist in refinancing loans for Goswami Infratech, backed by stakes held by Cyrus Investments Pvt Ltd in Tata Sons. This fundraising follows the group's unsuccessful negotiations with Power Finance Corporation for a potential ₹20,000 crore loan due to high exposure risks. Deutsche Bank has been conducting roadshows with potential investors.