Shapoorji Pallonji Group (SP Group) is in the final stages of concluding its One Time Resolution (OTR) plan, which was invoked by its lenders on October 26, 2020, following the group’s inability to repay debt.
However, a time line for the OTR, which was to safeguard the financial interest of all stakeholders and protect the livelihoods of the group’s employees and contractors, was not immediately available.
Shapoorji Pallonji and Company Private Ltd (SPCPL), the holding company of the 150-year-old SP Group, had sought the OTR for its obligations under the Covid-19 relief framework regulations of the Reserve Bank of India (RBI). The firm had applied for the reliefs under the provisions in September last year. Nearly a month later, all the lenders had approved the OTR unanimously.
Following the outbreak of the pandemic, 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. “We are currently finalising the plan in consultation with our lenders,” an SP Group spokesperson said.
In September last year, the SP Group had sought relief to restructure its ₹10,900 crore of debt under the resolution framework for pandemic-related stress. The framework was approved by RBI, based on the KV Kamath panel report, which allows financially stressed companies to recast their debt for two years.
The move came after Tata Sons had moved the Supreme Court on September 5, 2020, seeking to restrain SP Group from raising capital against the shares the latter held in the firm. The SP Group, which owns an 18.37 per cent stake in Tata Sons, was in the process of raising ₹11,000 crore, and had also signed agreements to raise ₹3,750 crore from Canadian asset manager Brookfield.
The SP Group had termed Tata’s move to block its fund-raising plans as violation of the Articles of Association (AoA), which only regulates the transfer of shares, and has no provision to restrict pledging or encumbrance of shares. The group also termed the move as “vindictive” and “intended to inflict irreparable damage on the SP Group”.