India’s SP Group unit gets investor nod for 2-month debt extension plea, sources say

MUMBAI: Investors have likely agreed to a request from India’s Shapoorji Pallonji Group for a two-month extension to repay debt raised by its real estate and civil engineering unit, Goswami Infratech, two sources familiar with the matter said on Friday.

The company had raised 143 billion rupees ($1.54 billion) in June 2023 through bond sales to marquee foreign private credit funds, including Ares Management, Cerberus Capital Management, Davidson Kempner Capital Management and Varde Partners.

The bonds were originally issued at a yield of 18.75%, which the company later stepped up by 200 basis points. After partial pre-payments to some investors, the bonds have an outstanding amount of 83.43 billion rupees, per local rating agency Care Ratings.

The funds mentioned did not immediately reply to Reuters emails seeking comment.

Goswami Infratech has asked investors to extend the maturity of the high-yield notes to June 30 from April 30, the sources said, asking not to be identified since they are not authorized to speak to the media. The company will not offer anything additional above its current yield, they added.

Almost all investors are on board and are likely to approve it without additional demands, one of the sources said.

Reuters reported on Monday that Goswami Infratech’s plan to raise $2.8 billion to $3.1 billion over the past few months has been delayed by a surge in rupee hedging costs.

Of this, the company had planned to raise about $500 million to $1 billion through U.S. dollar-denominated bonds, with the remainder via rupee-denominated three-year zero-coupon bonds, one of the sources said.

Deutsche Bank is the sole arranger for the upcoming zero-coupon bond issue, and has been conducting meetings with investors over the last few weeks.

Deutsche Bank declined to comment, while requests for comment sent to Shapoorji Pallonji Group went unanswered.