Deutsche Bank Earns Over $50 Million in Fees from Repeated SP Group Refinancings

Deutsche Bank Rakes in $50 Million in Fees from Shapoorji Pallonji Group Refinancing Deals

Deutsche Bank has earned more than $50 million in fees over the past four years through a series of debt refinancing transactions for the Shapoorji Pallonji Group. According to people familiar with the matter, the fees have come from multiple refinancing rounds linked to group entities, including Goswami Infratech. The multi-business conglomerate has repeatedly turned to private credit and structured debt markets to meet repayment obligations backed largely by its stake in Tata Sons.

The repeated refinancings have created a steady fee pool for arrangers even as SP Group's cost of borrowing has remained elevated. In one recent refinancing round, Deutsche Bank earned more than $14 million, as per sources familiar with the transactions.

The latest proposed refinancing is among the most expensive yet, with SP Group nearing a Rs 25,400 crore debt raise, with pricing expected to be around 18.75 percent, to refinance existing obligations, including debt linked to Goswami Infratech.

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Deutsche Bank has been a recurring arranger for the group's debt transactions. In June 2023, Goswami Infratech raised Rs 14,300 crore through high-yield debentures in what was then one of the largest rupee bond issuances by a low-rated borrower. Deutsche Bank and Standard Chartered were arrangers for that transaction.

The structure has since been refinanced and extended more than once, as the SP Group has struggled to monetise assets fast enough to reduce leverage. The group's debt troubles are rooted in its long-running liquidity stress and limited ability to monetise its most valuable asset — an 18.37-18.4 percent stake in Tata Sons held through promoter entities.

The investor base in SP Group's debt has included marquee private credit and institutional investors. Earlier debt transactions linked to the group saw participation from funds such as Ares Management, Cerberus Capital Management, Davidson Kempner Capital Management, and Varde Partners. Later private credit transactions also drew interest from global investors including BlackRock, Pimco, Farallon Capital Management, and others.

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For SP Group, the refinancings have helped avoid near-term defaults and buy time for asset monetisation. But they have also come at a high cost, with coupon and yield levels significantly above normal corporate borrowing rates.

For Deutsche Bank, the SP Group account has emerged as a lucrative recurring mandate in India's private credit market, giving the bank a central role in one of the country's most closely watched promoter-level debt situations.