Cash-strapped Shapoorji Pallonji Group is selling its stake in SP Ports Private Ltd (SPPPL) to joint venture partner HPCL for an undisclosed sum. It had entered into a joint venture with the state-owned refiner to set up a 5 million tonnes per annum LNG re-gasification terminal, which is being set up at Chhara in Gujarat.

SP Ports Private Ltd is a unit of Mumbai-based Shapoorji Pallonji Group, with JV HPCL Shapoorji Energy Private Ltd setting up the LNG re-gasification terminal. The venture is building the terminal at a cost of around Rs 5,411 crore. The sum received from HPCL would help the SP Group lower its debt.

However, reports said banks have referred the

Rs 10,900-crore debt restructuring of SP Group to the KV Kamath Committee for final approval, after the banking regulator accepted the committee report which allows firms to recast their debt for two years.

The group is reportedly looking to sell partial or full stakes in group firms such as Eureka Forbes, Afcons Infrastructure and Sterling & Wilson Solar and the proceeds will be used to pare some of its debt. The group has a total debt of over Rs 22,000 crore.

After the Supreme Court handed down its verdict last week in the battle between the Tatas and the Cyrus Mistry camp, the banks have turned very cautious and are unwilling to increase their exposure to the group. The apex court ruling on March 26 was a big win for Tata Sons in its four-year-long dispute with the Mistry family, its single largest stakeholder. The top court, however, refused to ascertain a fair value to the Mistry family’s 18.3 per cent holding in Tata Sons.

According to some reports, the lenders would like the SP group to raise funds through asset sale before the debt revamp is agreed upon. The other option is to pledge the shares held by the SP group in Tata Sons but that cannot be done now because of the court order.

HPCL in a regulatory filing said it has “has entered into a share purchase agreement (SPA) dated March 27, 2021 for acquisition of 50 per cent of the paid-up equity share capital of the Target Entity from SP Ports Private Limited”. The company stated that the acquisition is likely to be concluded by March 31, 2021, and does not require regulatory approval.

HPCL Shapoorji Energy Pvt Ltd (HSEPL) is an associate unlisted company of HPCL and a 50:50 JV with SP Ports, a unit of Shapoorji Pallonji Group. HSEPL is in the course of setting up and developing the re-gasification terminal at Chhara, Gujarat with capacity of 5 million tonnes per annum.