Shapoorji Pallonji Group taps private credit market to raise $1.6 bn

The group has been seeking ways to free up cash as rising interest rates bite

Shapoorji Pallonji

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By Baiju Kalesh, Saikat Das and Preeti Singh

India’s Shapoorji Pallonji Group is in talks to raise $1.6 billion via a private credit facility, according to people familiar with the matter, as conglomerate controlled by billionaire Shapoor Mistry looks to raise cash. 
Discussions are focused on a tenor of three years, with a rate of interest in the double digits, said the people, who declined to be identified because the talks are confidential. The engineering and infrastructure group could pledge some of its shares in Tata Sons to raise the capital, they said. 

A Shapoorji Pallonji spokesperson didn’t comment when contacted by Bloomberg via text message on Tuesday. 
The group has been seeking ways to free up cash as rising interest rates bite. It is weighing asset sales including a controlling stake in its flagship engineering firm that could raise about $2 billion, Bloomberg reported in April ,citing people familiar with the matter.

Read More: Tycoon Mistry’s SP Group Is Said to Weigh $2 Billion Asset Sales
Last year, SP Group sold water purifier equipment maker Eureka Forbes Ltd. to Advent International and also divested Sterling and Wilson Renewable Energy Ltd. to Reliance Industries Ltd. Following the sales, SP repaid $1.5 billion to lenders. 

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Deutsche Bank AG and Standard Chartered Plc are organizing the private credit deal, while talks have involved Ontario Municipal Employees Retirement System, Varde Partners LP, Cerberus Capital Management LP and Farallon Capital Management LLC, the people said. Part of the money raised will be used to refinance existing loans. 
Deutsche Bank and Ontario Municipal both declined to comment when contacted by Bloomberg. Other banks and investors did not immediately respond to emailed requests for comment. 

First Published: May 16 2023 | 12:37 PM IST

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