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Shapoorji Pallonji Group (SP Group) is actively engaging with various entities, including Power Finance Corporation, to secure a substantial fund infusion of approximately INR 20,000 crore. Sources familiar with the matter revealed ongoing discussions with global alternative investment firms such as Davidson Kempner Capital Management and Cerberus Capital Management. The formal launch of this fundraising endeavour is anticipated within the next seven to ten days, aligning with impending debt repayments due in May.
In 2021, SP Group used its stake in Tata Sons, the company that owns Tata Group, to borrow money. Sterling Investment Corporation (SICPL), an arm of SP Group, owns a big 9.1% of Tata Sons. They got the money through bond sales from US hedge funds Farallon Capital and Ares. They have about three years to pay it back.
In a separate development, Sterling and Wilson (S&W), an engineering, procurement, and construction entity under SP Group's umbrella, are exploring avenues to raise INR 700 crore by divesting stakes in its burgeoning data centre business. The strategic move involves carving out the data centre division into a distinct entity. Over the past eight years, S&W has established 24 data centres globally, boasting a cumulative capacity of 63 MW. The company is currently executing projects totaling 5 MW in Saudi Arabia, 10 MW for a hyperscale in Hyderabad, and 3 MW for a client spanning African countries like DR Congo and Angola. Anticipated future projects extend across regions including India, Egypt, UAE, Kenya, Tanzania, and Nigeria.
Meanwhile, Shapoorji Pallonji Group's pursuit of raising substantial funds up to INR 20,000 crore has garnered attention from a spectrum of lenders, including state-run Power Finance Corporation. The conglomerate, spearheaded by Indian billionaire Shapoor Mistry, has earmarked a substantial portion, potentially up to INR 15,000 crore, from Power Finance for this capital raise. Negotiations are underway, with the possibility of details evolving over time. Additionally, interest from Davidson Kempner Capital Management and Cerberus Capital Management LP indicates the multifaceted approach to securing funds.
The funds raised will mainly go towards paying off debt owed by SP Group's main investment firm, Sterling Investment Corp., which used shares in Tata Sons as collateral. These shares represent a big 9.1% of Tata Sons. The funding will likely involve private rupee-bonds. All parties have not responded to efforts made by us for a comment.
Notably, Goswami Infratech Pvt., a subsidiary of SP Group, had previously raised INR 143 billion through India's most extensive low-rated local currency bond issuance in the previous year.
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