The Shapoorji Pallonji (SP) group is reportedly in talks with lenders that include Power Finance Corporation (PFC) to raise Rs 20,000 crore to refinance debt taken against its holding in Tata Sons.

The debt was taken by Sterling Investment Corporation Pvt Ltd (SICPL), which has over 9 per cent in Tata Sons. They were issued in 2021 and had a tenure of three-and-a-half years. The funds were largely raised from Ares SSG and Farallon Capital.

While the SP group has started the debt recast exercise, a Bloomberg report on Thursday said it has approached PFC for funds of up to Rs 15,000 crore.

Even as negotiations continue with PFC, it
it has reached out to Davidson Kempner Capital Management and Cerberus Capital Management LP.

The payment is due in the last week of May.

Earlier reports had said the Mistry family was looking to raise long-term loans to redeem the bonds which contain tough clauses such as a higher interest rate if the loan is not repaid by the due date.

In July 2023, group firm Goswami Infratech raised over Rs 14,300 crore through rupee-denominated zero-coupon non-convertible debentures (NCDs) from a group of global investors, with a maturity period of 2.5 years.

The bonds were raised at a yield of 18.75 per cent and issued using as collateral the pledged shares of Tata Sons and Afcons Infrastructure, which is the engineering, procurement and construction (EPC) arm of the group.

The funds were tied to the company monetising assets such as a stake sale in Gopalpur Port by the end of 2023 and taking Afcons public.

It is learnt the SP group has proposed it will repay nearly half the amount of Rs 14,300 crore raised by Goswami Infratech.

As it could not complete the sale of the Gopalpur port within the given time, a bond premium of 200 basis was added to the principal amount as a penalty.

The SP group has been looking to trim its debt over the past couple of years.

In 2021, Advent International the global private equity investor signed a definitive agreement to acquire a majority stake in Eureka Forbes Ltd which is present in water purification, vacuum cleaning and other emerging categories.

The transaction valued Eureka Forbes at an enterprise value of Rs 4,400 crore.

It also sold a stake in Sterling and Wilson Renewable Energy to Reliance Industries in 2021.