Shapoorji Pallonji Group is eyeing to seal a $3.4 billion debt deal likely to close on May 14. The construction-to-real estate conglomerate is holding talks for a zero-coupon rupee bond to carry an annual yield of 19.75% and a 16% loan-to-value ratio for a period of three years, Bloomberg reported, citing sources. The move is likely to ease SP Group’s long-standing issue with debt. The deal is likely to be complete this week as the India-Pakistan geopolitical tensions have eased a bit.
In the debt deal nearly a dozen investors participated, including Ares Management Corp, Cerebus Capital Management LP, Davidson Kempner Capital Management, and Farallon Capital Management. Germany’s investment firm Deutsche Bank will reportedly act as the sole arranger and the trustee.
The $3.5 billion fundraiser, which is reportedly set to be Asia’s largest private credit transaction to date, has attracted some first-time investors as well, like Synergy Capital, Broadpeak, BlackRock, Pimco and UK-based Sona Asset Management, the Economic Times earlier reported.
“The signing will happen next week as the geopolitical tensions have calmed after increased tensions between India and Pakistan,” the ET reported, citing a source.
The transaction has been reportedly fully-subscribed and excess investor demand in the deal has resulted in tight allocation.
Earlier this week, the group launched an internal probe into the alleged conduct of one of its executives arrested by the CBI in a bribery case.
“The SP Group has been made aware of a serious allegation of misconduct against an employee of one of our Group Company subsidiaries. Given the seriousness of these allegations, the group has already launched an internal enquiry into the alleged conduct and will take the necessary steps based on the outcome of the investigation,” said the company in a statement on May 10.
