Shapoorji Pallonji Group kicks off ₹25,500 crore refinancing with rupee bond sale

Shapoorji Pallonji Group has kicked off a planned ₹25,500-crore ($2.7 billion) refinancing with the sale of local-currency bonds, according to people familiar with the matter, allaying concerns over looming debt repayments.

One of the group’s subsidiaries will issue about ₹15,000 crore worth of rupee-denominated bonds to a group of investors including Farallon Capital Management, Davidson Kempner Capital and Cerberus Capital Management, said the people, who asked not to be identified because the information is private. The funds will be used to refinance debt at unit Goswami Infratech Pvt.

Deutsche Bank AG is the sole arranger for the offering and may invest about $400 million, making it one of the largest investors, the people said.

The fundraising provides the infrastructure-to-real-estate conglomerate much-needed liquidity after it twice extended the maturity of debt owed by Goswami. It also eases concerns about its ability to refinance near-term debt after months of negotiations with creditors.

The three-year zero-coupon rupee bonds will be priced to yield 18.95 per cent, according to the people. Existing investors will receive a small discount, taking their effective yield to about 19.05 per cent. The bonds also include a greenshoe option.

The borrowing is backed by shares in group company Afcons Infrastructure Ltd. and Tata Sons Pvt., the unlisted holding company of the Tata Group in which the SP Group holds a stake, the people said. The loan agreement also requires the company to repay ₹13,500 crore within 24 months. The transaction is expected to close as early as Friday, according to the people.

Shapoorji Pallonji and Farallon Capital did not immediately reply to an email seeking comments. Deutsche Bank, Cerberus, Davidson Kempner declined to comment.

Separately, the group is set to launch the three-year dollar tranche as early as Friday, seeking to raise at least $600 million, the people said, adding the final size will depend on investor demand. The pricing is expected to be in the mid-14 per cent range, depending on the hedging cost, said the people.

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