SP Group Secures Rs 25,500-Crore Refinancing Deal Led by Davidson Kempner, Farallon, and Cerberus; Closure Expected Within Two Weeks

Shapoorji Pallonji Group Secures Refinancing for Rs 25,500 Crore in Largest Private Credit Transaction

The Shapoorji Pallonji (SP) Group has successfully tied up refinancing for nearly Rs 25,500 crore of upcoming debt maturities, marking one of the largest private credit transactions in India in recent years. The transaction, which is expected to close over the next two weeks, has been priced at 18.95 percent per annum and is largely financed by a consortium of global alternative investment firms led by Davidson Kempner, Farallon Capital, and Cerberus Capital.

According to sources, the refinancing has been structured to ease a major near-term debt overhang for the group, whose promoter-level borrowings backed by Tata Sons shares have been under intense scrutiny in debt markets for the last several years. The transaction is expected to significantly ease the debt burden for the group, allowing it to manage repayment obligations amid a difficult funding environment for highly leveraged promoter entities.

The refinancing is part of the group's long-running efforts to restructure debt raised against its holding in Tata Sons. The Mistry family, through Sterling Investment Corp Pvt Ltd, owns slightly over 9 percent in Tata Sons, the holding company of the Tata Group. Overall, the Mistry family holds over 18 percent in Tata Sons.

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A portion of the facility is being made available to high-net-worth individual investors (HNIs), with a minimum ticket size of Rs 10 crore. The HNI portion has been structured as zero-coupon non-convertible debentures (NCDs) with a three-year tenure and a yield of 18.25 percent.

The refinancing marks the latest chapter in SP Group's efforts to restructure debt and manage repayment obligations. The group has repeatedly turned to private credit markets, structured bond issuances, and refinancing exercises over the last two years to manage its debt burden.

In 2023, group entity Goswami Infratech raised Rs 14,300 crore through zero-coupon non-convertible debentures from investors including Cerberus Capital, Davidson Kempner, Varde Partners, Canyon Capital, Deutsche Bank, Edelweiss Special Opportunities Fund, and Ares SSG. The group has also accelerated deleveraging efforts through asset monetisation, using proceeds from the Afcons Infrastructure IPO and the sale of Gopalpur Port to Adani Ports to pare a portion of its debt obligations.

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The successful closure of the refinancing could provide the group with additional runway to manage maturities and pursue further deleveraging and monetisation plans. The transaction underlines the growing role of global private credit investors in financing large Indian promoter groups through structured debt backed by high-quality underlying assets.