Lenders to the Shapoorji Pallonji group led by the State Bank of India (SBI) have given their green signal to a Rs 10,900cr debt recast package plan for the group.
The proposal is now before the K.V. Kamath-led RBI panel for its approval. The Reserve Bank of India (RBI) in August last year had said the Kamath panel will vet all resolution plans of entities hit by the vagaries of the coronavirus-induced lockdown and having exposures of at least Rs 1,500 crore.
Care Ratings has given an RP4 rating for the restructuring plan of the SP group, the minimum rating required by an entity keen on a resolution and whose exposure is over Rs 100 crore. The RBI had mandated that entities keen on a recast must get itself rated by at least one credit rating agency.
According to the recast plan, the SP group will not have to make principal payments for two years while the interest payments will be suspended till September this year.
However, there is no relief on the interest rate and the group will have to pay the previously agreed rate set with the lenders.
The group owes a little over Rs 22,000 crore, but under this package loans worth Rs 10,900 crore will be restructured.
The SP group had earlier told the lenders that it was also looking at asset sales in various arms of the group such as Eureka Forbes, Sterling & Wilson Solar and Afcons Infrastructure which are expected to be completed in the next fiscal.
It is also learnt that promoter borrowings of around Rs 2,700 crore will be converted into perpetual debt to lessen the burden.
The development comes just days after the Supreme Court upheld the sacking of Cyrus Mistry as the chairman of Tata Sons back in 2016 by the board.
Last week, a bench of Chief Justice S.A. Bobde and justices A.S. Bopanna and V. Ramasubramanian said it was allowing the appeals filed by Tata Group.
The court said, “all the questions of law are liable to be answered in favour of the appellants Tata Group and the appeals filed by the Tata Group are liable to be allowed and those by Shapoorji Pallonji Group are liable to be dismissed”.
