MUMBAI: Tata Trusts chairman Noel Tata has presented a liquidity proposal for the debt-laden Shapoorji Pallonji Group (SP Group), offering a Rs 25,000-crore share buyback plan, at a Tata Sons board meeting on Thursday.
Noel’s wife, Aloo, is the sister of SP Group chairman Shapoor Mistry. His family owns 18.4% of Tata Sons, while the trusts own 66.6% of the group.
In a statement, the trusts said Noel “tabled a proposal received from the SP Group regarding monetization of a portion of their Tata Sons shareholding held through Sterling Investments Corporation and Cyrus Investments.
“This proposal is based on meetings and discussions held earlier between Noel Tata, Tata sons chairman N Chandrasekaran and Shapoor Mistry,” the statement said.
The transaction envisages the sale of Tata Sons shares held by the SP Group that would, at a valuation determined in accordance with the Income Tax Rules, 1962, yield a gross consideration of Rs 25,000 crore.
The SP Group has proposed that the share buyback be carried out in two tranches over 18 months. Tata Sons would initiate a selective capital reduction process through the NCLT, while the valuation of Tata shares would be based on their fair value under income tax rules.
Noel also suggested various avenues for raising the required funds, including internal cash flows, sale of listed shares, bringing in an investor into some of the newer businesses and listing some of the businesses through an offer for sale.
He also requested the Tata Sons board to take the necessary steps to initiate the NCLT process and authorise the operating teams of Tata Sons and the trusts to continue discussions with the SP Group and its bankers and report to the board.