Business conglomerate Shapoorji Pallonji Group (SP Group) has repaid its lenders Rs 12,450 crore, exiting its One-Time-Resolution (OTR) plan that was approved by a committee last year.
The Mistry family infused Rs 5,100 crore in Shapoorji Pallonji and Company (SPCPL), the holding company of the group, last year. The group also raised Rs 3,750 crore through monetisation of its two assets including Sterling Wilson Renewable Energy and Eureka Forbes. The balance funds were raised from internal accruals of the group.
The SP Group — controlled by Mistry brothers Shapoor and Cyrus — also holds an 18.4% stake in Tata Sons, the holding company of the Tata group.
The real estate franchise of the SP Group posted more than Rs 4,000 crore of sales in financial year 2022, despite the sector being impacted by the Covid-19 pandemic and resultant lockdowns. A majority portion (internal accruals) of this was also used to settle the OTR.
SPCPL’s OTR, which was the largest in the country, was implemented on Thursday by a consortium of lenders led by the State Bank of India.
“We are happy to have repaid all our lenders ahead of plan. We expect this development to have a positive impact on the group’s credit outlook. We thank all our stakeholders including our business partners and bankers for their trust in us. We are confident that we will emerge stronger as a group,” an SP Group spokesperson said.
SPCPL is an engineering and construction company with interests in diverse sectors including real estate and oil & gas. Its construction business has an order book of over Rs 30,000 crore.
In April 2021, the KV Kamath committee approved the group’s OTR package after its businesses were hit by the Covid-19 pandemic. As part of the OTR, the group had agreed to sell assets and repay the debt by March 31, 2022.
Later, the group had also sought a two-year extension of the OTR deadline, but it repaid the entire debt, which had risen from Rs 10,900 crore to Rs 12,450 crore by March, on Thursday.
“The lenders did not have to take any haircut,” a banker close to the development said.
As of September, the 156-year-old business conglomerate had a net debt of Rs 10,900 crore, which it slashed to Rs 6,500 crore following a stake sale in its consumer durable firm Eureka Forbes.
The group had raised Rs 4,400 crore from the stake sale after it offloaded a 72.56% stake to American private equity fund Advent International.
Later in October, the Group raised another Rs 2,845 crore by selling a 40% stake in Sterling & Wilson Solar (SWSL) to Reliance New Energy Solar, a wholly-owned subsidiary of billionaire Mukesh Ambani-controlled Reliance Industries. This amount was also used to pare debt.
The entire stake in Eureka Forbes and SWSL was sold by the promoters and the funding was used to pare debt. Following this, the group’s debt was at about Rs 3,655 crore.
In November, sources had told FE that the Shapoorji Pallonji Group aims to become net debt free by March and start the new financial year with a clean slate.