The Shapoorji Pallonji Group is reportedly in talks to raise $1.6 billion through a private credit facility.

The conglomerate which is present in businesses ranging from engineering, construction and real estate to financial services may also pledge some of its shares in Tata Sons to raise the cash, a Bloomberg report said. Part of the proceeds will be used to repay debt.

The group is reportedly looking at raising capital with a tenor of three years.

Deutsche Bank AG and Standard Chartered Plc are organising the private credit deal; the negotiations have also involved Ontario Municipal Employees Retirement System, Varde Partners LP, Cerberus Capital Management LP and Farallon Capital Management LLC.

While the Mistry family holds around 18.4 per cent of Tata Sons the principal holding company of the Tata group, the markets buzzed with the possibility of the Mistrys pledging part of the Tata holding.

There have been reports previously of Tata Sons objecting to the SP Group’s plan to pledge a part of its stake.

The Tatas had maintained that there is a restriction on the transfer of Tata Sons shares to a non-shareholder and it has the first right of refusal.

Legal sources close to the SP Group had said that the articles of association (AoA) did not stop the pledging of shares.

The Shapoorji Pallonji group has undertaken some major deals over the past couple of years to bring down their debt.

In July last year, Shapoorji Pallonji and Company exited Eureka Forbes after selling its remaining 8.7 per cent stake to Lunolux, a firm backed by private equity firm Advent International.

Lunolux Ltd is a special purpose vehicle incorporated by AI Global Investments (Cyprus) PCC Ltd, which operates as the investment hub for Asia for all the funds managed by Advent International.

In October, Reliance New Energy Sola acquired 40 per cent in Sterling & Wilson Solar Limited from Shapoorji and others through a series of transactions.