India’s Shapoorji Pallonji (SP) Group is planning a fresh fundraising exercise involving both US dollar and rupee-denominated debt as the conglomerate seeks to meet a 35 billion rupee ($365 million) payment obligation at one of its subsidiaries.
The group has requested an extension of the September 30 repayment deadline for Porteast Investment to October 31, according to people familiar with the matter.
Under the proposed strategy, SP Group would raise dollar-denominated debt and use the proceeds to purchase rupee securities issued by another group company. The plan would replicate a financing structure used in July, when its Mercury Finance unit raised $650 million through dollar debt carrying a 14.5% yield.
The proceeds from that transaction were invested in rupee-denominated bonds issued by Eqyizen Investment, which raised 213.5 billion rupees through three-year zero-coupon bonds at an 18.95% yield. The group now plans to use an unexercised option from that issue to raise additional funds.
SP Group is carrying more than 500 billion rupees in high-interest debt due over the coming years. Its financial position has received some support from a proposal to sell 250 billion rupees worth of its stake in Tata Sons, which could provide additional liquidity.
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