The Shapoorji Pallonji Group, controlled by billionaire Pallonji Mistry and his family, is in preliminary discussions to borrow as much as $1 billion to repay maturing debt using part of its stake in Tata Sons Ltd. as collateral, said people with knowledge of the matter.
Mistry, whose son Cyrus was ousted as chairman of Tata Sons in 2016, is the biggest single shareholder in India’s largest conglomerate, and is seeking a loan as the coronavirus outbreak delays a plan to sell assets, the people said, asking not to be identified as the discussions are private. The tycoon’s net worth dropped by 25 percent to $16.2 billion since the beginning of the year amid a global rout triggered by the pandemic, according to the Bloomberg Billionaires Index.
The billionaire is trying to use his 18 percent stake in Tata Sons, which is estimated to be worth as much as $14 billion, as the Covid-19 pandemic stalls economic activity across the world. However, he may face a hurdle: the shares in the unlisted Tata holding company are closely held and illiquid. A legal battle between Tata Sons and Cyrus Mistry following his ouster may also deter potential creditors.
A representative for Shapoorji Pallonji Group declined to comment.
Mistry’s Shapoorji Pallonji & Co. had 90.2 billion rupees ($1.2 billion) of debt as of Sept. 30, according to rating assessor ICRA Ltd. The company planned asset sales, including solar power plants and road assets, in a bid to reduce debt by as much as 40 billion rupees, a person with direct knowledge of the matter said in August.
Founded in 1865, the Shapoorji Pallonji group, which has built some of Mumbai’s landmarks, including the Reserve Bank of India building, is still better placed than most of its corporate peers, with total revenue of $7 billion for the year ended March 2019.
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