Companies

On debt rejig drive, SP Group may sell stake in 3 companies

Surabhi Mumbai | Updated on March 08, 2021

To raise ₹10,300 cr as part of pact with lenders

 

The Shapoorji Pallonji Group is looking to monetise its assets and may sell its stake partly or fully in at least three of its group companies, including Eureka Forbes, Sterling and Wilson Solar and Afcons Infrastructure, as part of the one-time debt restructuring package being discussed with the lenders.

The company plans to raise about ₹10,332 crore through this asset sale. Additionally, Inter Corporate Deposits (ICDs) given to the SP Group companies are also likely to be realised, largely from its real estate joint venture, SD Corp, and other entities forming part of Shapoorji Pallonji and Company Private Ltd’s real estate portfolio through monetisation of their project assets.

“These activities are likely to be taken up in 2021-22,” said a source close to the development, adding that plans for the proposed divestment in the three companies will depend on the valuations on the closure of each of the transactions.

In September 2020, the SP Group had sought relief to restructure its ₹10,900-crore debt under the resolution framework for pandemic-related stress announced by the Reserve Bank of India. Sources said the SP Group is in talks with the lenders and likely to finalise the resolution package soon.

Prepayment of loans

Proceeds from the proposed monetisation of assets will be used for prepayment of loans.

Proceeds from ICDs aggregating to about ₹836 crore are also expected to be used for prepayment of the debt and any balance amount would be used for operations of the company.

As part of the one-time restructuring, promoter debt of ₹2,724 crore as at end of 2019-20 is also proposed to be converted to perpetual debt.

For prepayment of outstanding debt, expected recoveries from claims so far not recognised by the company in the books of about ₹700 crore are also proposed to be used.

An email query from BusinessLine to the SP Group remained unanswered. Further, as part of the resolution plan, no concession in the rate of interest has been proposed. A haircut is also unlikely in the principal repayment.

There will also be no pooling of security and the security of each lender will continue with it exclusively. An interest moratorium up to September 30, 2021 is also likely. The unpaid interest for the moratorium period up to August 31, 2020 and interest till September 30, 2021 on all fund-based facilities may be converted to funded interest term loan.

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Published on March 08, 2021

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