Shapoorji Pallonji Group Unit Receives Investor Approval for 2-Month Debt Repayment Extension

Debt Repayment Extension Request from Goswami Infratech

Investors are poised to approve a two-month extension to repay debt raised by India's Goswami Infratech, a real estate and civil engineering unit of the Shapoorji Pallonji Group. According to sources familiar with the matter, the company had requested a two-month extension to repay the debt, which would push the maturity date from April 30 to June 30.

In June 2023, Goswami Infratech raised 143 billion rupees ($1.54 billion) through bond sales to marquee foreign private credit funds, including Ares Management, Cerberus Capital Management, Davidson Kempner Capital Management, and Varde Partners. The bonds were originally issued at a yield of 18.75%, which the company later increased by 200 basis points. Following partial pre-payments to some investors, the outstanding amount of the bonds stands at 83.43 billion rupees, as per Care Ratings.

Goswami Infratech's request for an extension is likely to be approved by investors without any additional demands. The company has not offered any incentives above its current yield. The extension request is part of the company's efforts to manage its debt repayment obligations, which have been affected by a surge in rupee hedging costs.

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Goswami Infratech had planned to raise $2.8 billion to $3.1 billion over the past few months, but its plan has been delayed due to the increase in rupee hedging costs. The company had intended to raise about $500 million to $1 billion through U.S. dollar-denominated bonds, with the remainder via rupee-denominated three-year zero-coupon bonds. Deutsche Bank is the sole arranger for the upcoming zero-coupon bond issue and has been conducting meetings with investors over the last few weeks.

Note: The exchange rate is $1 = 92.7850 Indian rupees.