Shapoorji Pallonji Group Receives Approval to Postpone Bond Payments Ahead of Maturity Deadline

Shapoorji Pallonji Group Secures Creditor Approval to Delay Payment on High-Yield Bond

Indian infrastructure conglomerate Shapoorji Pallonji Group has secured creditor approval to delay payment on one of the nation's biggest high-yield bonds, just days ahead of the April 30 maturity. The company received unanimous consent from holders representing the outstanding amount of the note, which pays a yield of 20.75%.

According to sources familiar with the matter, creditors have received a 25 basis points consent fee for agreeing to push back the maturity to June 30. The high-yield note was issued by Shapoorji unit Goswami Infratech Pvt. in 2023, when the company issued 143 billion rupees ($1.5 billion) of zero-coupon securities. As of March 31, about 135.83 billion rupees was outstanding on the bond, including interest.

The Shapoorji Pallonji Group, controlled by billionaire Shapoor Mistry, operates across various sectors, including engineering and construction, real estate, infrastructure, energy, and industrial projects. Founded over 160 years ago, the group is best known for building landmarks such as the Reserve Bank of India building and the Al Alam Palace for the Sultan of Oman.

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The company has faced liquidity crunches after piling on debt before the pandemic, prompting it to list subsidiaries and offload assets. Group representatives told some investors earlier this month that the company was considering a potential offering of about $2.6 billion-equivalent of dollar- and rupee-denominated bonds. The proceeds from this offering would be used to refinance the Goswami debt that has been extended.

Last year, Shapoorji Pallonji Group closed a separate private credit financing of over $3 billion in India's biggest deal yet at a yield of 19.75%. This high-yield deal reflects the risks for creditors, as the group faces uncertainty about its ability to transfer its stake in privately-held Tata Sons, which makes up most of the collateral for the private credit deal. Tata Sons' directors have the ability to block certain share transfers.