
MUMBAI: The Shapoorji Pallonji Group, which owns 18.6% in over $30.5 billion worth Tata Sons, is close to sewing up a funding deal with a group of overseas alternative asset managers to refinance its outstanding debt that runs in excess of $3.2 billion.
The group has been trying to raise funds to refinance its mounting debt for quite some time, and was close to line up Rs 20,000 crore of funding late last year from state-run Power Finance Corporation (PFC) but the lender backed out at the final stage. Before that its attempts to raise money didn’t materialise, forcing it to buy time from creditors after paying interest. A large portion of the debt was maturing last May.
As per a source in the know of the ongoing discussions, the Shapur Mistry-led group is in advanced stage of talks with four alternative asset managers -- Davidson Kempner and Cerberus Capital, along with its existing investors Farallon Capital Ares Management, who are willing to partially rollover their debt maturing later this year.
Sterling Investments, the main holding company of the group, holds a little over 9% in Tata Sons, while other group entities own the remaining stake in the country’s largest conglomerate, valued at over $165 billion, which means the SP group’s stake is worth over $30.5 billion. “The SP group and these alternative asset managers are likely to sign an agreement within the next 40-45 days,” the source told TNIE.
The SP group didn’t respond to calls seeking confirmation.
The group has been looking for fundraising since early 2024 but without much success. Most of its existing debt was maturing in May 2024. Since then it got an extension from creditors by paying interest. Most of the group’s debt is linked to the group’s promoter entity, Sterling Investments, which had secured $2.6 billion in 2021 from alternative investment manager Ares Management and the hedge fund Farallon Capital with a tenor of 3.5 years.
“The group is looking to refinance its debt with fresh funding from Davidson Kempner and Cerberus Capital and partial financing from existing creditors Farallon and Ares who are willing to roll over a portion of their debt maturing by May,” the source explained.