Mumbai: The Shapoorji Pallonji (SP) Group that last month started an exercise to raise funds to refinance maturing debt and reduce borrowing costs has increased the target to $3.25 billion from $2.6 billion. The group is looking also to refinance a portion of the debt raised by its Goswami Infratech unit in 2023 from global funds and foreign banks with a view to extend the loan maturity by four additional years, besides paying upcoming maturities and prepay debts owed to Ares and Farallon. According to term sheets circulated among potential investors, the fundraising, managed by Deutsche Bank, is structured as a five-year facility, comprising non-convertible debentures (NCDs) with an expected yield of about 18%. The real estate and construction to financial services group is tapping alternative asset managers and private credit players in this funding round. Two people close to the deal said it has already received commitment for 75% of the $3.25 billion target.117185044A spokesperson for the SP Group did not respond to request for comment.Its previous fundraising in June 2023 included a put option for December 2025, with the NCDs privately placed and subsequently listed on the BSE.In 2021, the group's promoter entity, Sterling Investments Pvt Ltd, had secured $2.6 billion from alternative investment firm Ares SSG and US hedge fund Farallon by pledging a 9.1% stake in Tata Sons, along with certain real estate assets (SP Group promoters Mistry family own over 18% in Tata Sons). These high-cost NCDs, priced below 20%, are set to mature in March 2025, needing refinancing efforts.Additional proceeds from the expanded fundraising will help it in refinancing the June 2023 debt raised by real estate and construction firm Goswami Infratech, where the debentures were backed by the stake held by Cyrus Investments Pvt Ltd, another group company that also held a 9.1% stake in Tata Sons. This facility, slated to mature in April 2026, was one of the country's largest low-rated bond issuances, attracting investors such as Cerberus, Ares, Davidson Kempner, Deutsche Bank and Standard Chartered Bank.This latest fundraising comes after the group's failed negotiations with Power Finance Corporation for a potential ₹20,000 crore loan, which collapsed due to high exposure risks as per the state-run lender. Deutsche Bank has been actively engaging potential investors during roadshows.
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