Shapoorji Pallonji Group Cancels Loans and Abandons Single Resolution Plan; Mistry family infuses Rs 5,100 crore in holding company

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Business conglomerate Shapoorji Pallonji Group (SP Group) has repaid its lenders Rs 12,450 crore, exiting its One-Time-Resolution (OTR) plan which was approved by a committee last year.

The Mistry family infused Rs 5,100 crore into Shapoorji Pallonji and Company (SPCPL), the group’s holding company, last year. The group also raised Rs 3,750 crores through the monetization of its two assets, including Sterling Wilson Renewable Energy and Eureka Forbes. The remaining funds were raised from internal group accrued liabilities.

The SP group — controlled by brothers Mistry Shapoor and Cyrus — also owns an 18.4% stake in Tata Sons, the holding company of the Tata group.

SP Group’s real estate franchise recorded over Rs 4,000 crore in sales in the 2022 financial year, despite the sector being hit by the Covid-19 pandemic and resulting lockdowns. A majority part (internal adjustment accounts) of this amount was also used to settle the OTR.

SPCPL’s OTR, which was the largest in the country, was set up on Thursday by a consortium of lenders led by the State Bank of India.

“We are pleased to have repaid all of our lenders ahead of schedule. We expect this development to have a positive impact on the group’s credit outlook. We thank all of our stakeholders, including our business partners and bankers, for the trust they place in us. We are confident that we will come out of this stronger as a group,” said an SP Group spokesperson.

SPCPL is an engineering and construction company with interests in various industries, including real estate and oil and gas. His 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 business was impacted by the Covid-19 pandemic. As part of the OTR, the group had committed to selling assets and repaying debt by March 31, 2022.

The group later also requested a two-year extension of the OTR deadline, but paid off the entire debt, which had risen from Rs 10,900 crore to Rs 12,450 crore in March on Thursday.

“The lenders didn’t get any haircuts,” said a banker familiar with the development.

In September, the 156-year-old business conglomerate had net debt of Rs 10,900 crore, which it reduced to Rs 6,500 crore following a sale of stake in its durable consumer firm Eureka Forbes.

The group had raised Rs 4,400 crore from the sale of the stake after selling a 72.56% stake to US 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 by Reliance Industries. This amount was also used to reduce debt.

The entire stake in Eureka Forbes and SWSL was sold by the promoters and the financing was used to reduce debt. Following this, the debt of the group was around Rs 3,655 crore.

In November, sources told FE that the Shapoorji Pallonji Group aimed to be free of net debt by March and start the new financial year with a clean slate.

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