Shapoorji Pallonji Group Plans Major Debt Cut with Potential Exit from Tata Sons

Shapoorji Pallonji Group is likely to use some parts of the proceeds from the potential sale of its 18.4% stake in Tata Sons to repay debt of its infrastructure company. This comes at a time when the construction-to-real estate conglomerate is eyeing to settle loans worth $1bn in bonds that were issued by Goswami Infratech and are set to mature in April 2026, Bloomberg reported. 

By repaying its debt, the company reportedly aims to gain investors’ support so that group can push for its capital expenditure plans. The plan to use the fund to pay off debt is still in its early stage and could change, Bloomberg reported.

The development comes just a week after the Economic Times reported that N Chandrasekaran-led Tata Sons held a discussion with its minority shareholder, the SP Group, to chart out an exit and monetisation plan for the latter’s stake in the company. 

“It was done to get a sense of expectation from the SP side. It will be a long journey towards any final settlement talks between the two,” ET reported, citing sources. 

The 18.37% stake held by the SP group in the Tata Group’s holding company has been pledged by it with lenders. It owns a stake in Tata Sons via two of its companies, including Cyrus Investments Pvt Ltd. and Sterling Investment Corporation. 

The development is significant, as it is reportedly the first formal meeting between the heads of the two companies since 2016. The bond between the two big Indian giants, who historically shared good relations, became bitter after the ousting of Cyrus Mistry as Tata Sons chairman in 2016. 

The move comes just days after Noel Tata-led Tata Trusts passed a resolution that the holding company should continue to remain an unlisted private firm and start discussions with the construction-to-real estate conglomerate for potential exit options.