Shapoorji Pallonji Group may raise $1.75 billion by pledging Tata Sons stake: Report

Shapoorji Pallonji (SP) Group is reportedly in talks with lenders to raise $1.75 billion by pledging half of its stake in Tata Sons. As per a media report, the single largest shareholder of Tata Sons, is in talks to raise funds to repay part of its debt obligations and infuse cash into its operating companies.

The Economic Times report suggested that the group has already pledged close to 9 per cent of its 18.37 per cent stake in Tata Sons and that post the latest transaction, its entire stake, which is valued at close to Rs 94,000 crore, would be pledged to lenders, including two foreign banks and several overseas hedge and credit funds.

Tata Sons is the principal investment holding company and promoter of Tata companies. About 66 per cent of the equity share capital of Tata Sons is held by philanthropic trusts.

In March, an ET report had suggested that the SP group has embarked on a business financial re-engineering by creating parallel structures for its real estate and infrastructure units under its existing holding companies, SP Finance and SC Finance.

The March move, the ET report, suggested would help the group improve operating cash flows since investments in long-lead businesses like infrastructure and real estate create timing mismatch, which puts debt burden on the balance sheet, officials said.

Founded by Pallonji Mistry in 1865, the SP Group is one of India's oldest diversified industrial conglomerates and has presence across sectors such as real estate, construction, infrastructure, solar power generation and allied services for the oil and gas sector among others.

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