SP Group debt. Shapoorji Pallonji Group's ₹10,900 cr one-time debt recast plan gets lenders nod

Lenders have approved the ₹10,900 crore one-time debt restructuring proposal of Shapoorji Pallonji Group. The proposal was put before the KV Kamath committee set up by the Reserve Bank of India to clear one-time restructuring (OTR) proposals.

The development comes as a huge relief to the group, facing defaults on commercial papers. The default also prompted rating downgrades by CARE Ratings Ltd. and ICRA Ltd. The Supreme Court’s recent ruling against the Mistry family in the case against Tata Sons had also created uncertainty about how the banks would decide on the debt restructuring.

But now, with the OTR approved, Shapoorji Pallonji Group will be looking to monetise its assets and may sell its stake partly or entirely in at least three of its group companies, including Eureka Forbes, Sterling and Wilson Solar and Afcons Infrastructure, as part of the package 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, mainly 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.

Following the pandemic’s outbreak, the businesses of SPCPL, much like many global and domestic firms, were also impacted in 2020. The construction and real estate businesses of the SP Group, which is its mainstay, were badly hit by the pandemic. In September 2020, the SP Group had sought relief to restructure its ₹10,900-crore of debt under the resolution framework for pandemic-related stress. SP Group had applied under the OTR, under which the company had asked the loan repayment timeline to be extended by two years.

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