InvestorQ : Is it true that the Shapoorji Pallonji group of Mumbai has been raising funds against its holdings in Tata Sons? Is the SP group in a major cash crunch?
NISHA Nayak made post

Is it true that the Shapoorji Pallonji group of Mumbai has been raising funds against its holdings in Tata Sons? Is the SP group in a major cash crunch?

Answer
image
1 year ago
Follow

The group has been in a cash bind over the last few months and that was also evident with the group trying hard to raise around Rs.5,000 crore to meet their temporary liquidity needs. The Shapoorji Pallonji (SP) Group has apparently raised $200 million in bridge financing from Deutsche Bank against its shares in Tata Sons. The Shapoorji Pallonji (SP) Group raised these funds through Sterling Investments and Cyrus Investments and they entailed pledge of shares of Tata Sons.

According to reports from sources, this short-term finance is part of a larger fundraising exercise that Mistry and the SP Group are currently evaluating to deal with the liquidity squeeze that they have been facing in the last few years. The 18% stake that the Mistry family owns in Tata Sons is held through the two entities viz. Sterling Investments and Cyrus Investments. The SP Group has already initiated several divestment exercises including the sale of its flagship company Eureka Forbes as well as man of its solar energy assets. The group currently requires Rs. 6,000 crore to restructure the balance sheet.

The group had run into problems as many of the construction contracts they received from the Tata Group had been put up for competitive bidding. This disrupted their regular cash flows and the dispute with the Tatas only made things worse for the SP group. This should hopefully help them to stave off a larger liquidity crunch in the group.

1 Views