Banks seek panel nod on SP Group’s debt plan

Banks have referred the Rs 10,900 crore Covid-19 debt restructuring package of the Shapoorji Pallonji Group to the KV Kamath committee for final approval. The recast scheme which was sent to the committee on Friday last week, includes a two-year moratorium on principal payments and relief on interest payments for two quarters.Bankers said they were not worried about payment defaults by the SP Group as all the loans are backed by adequate collateral. People close to the SP Group have told lenders that the Supreme Court verdict on Friday gives the group the freedom to pledge Tata Sons shares against loans. But these shares have not been pledged to borrow money from banks and have no role to play in this recast plan.“The one-time restructuring scheme has been sent to the Kamath committee. This is a group where the banks don’t expect to lose any money. All loans are backed by sufficient collateral and they (SP Group) have time and again demonstrated their willingness to pay,” said a senior banker on the condition of anonymity.81741534“We are giving them two years’ time to monetise assets like Eureka Forbes and pay the dues. They have also pledged a lot of real estate as collateral which gives us sufficient comfort,” the banker added.To give relief to borrowers hit by Covid, the Reserve Bank of India had set up a panel last year under veteran banker KV Kamath to define a one-time recast framework.SP Group’s Total Dues Pegged at Rs 23,500 CrAs per the framework, banks need to get a final go-ahead from the panel on restructuring of loans above Rs 1,500 crore.The SP Group has told lenders that it would raise nearly Rs 10,000 crore through asset sale and use a bulk of these proceeds to repay loans. The assets that could be divested include Eureka Forbes, Sterling and Wilson Solar and Afcons Infrastructure. SP Group reportedly owes nearly Rs 23,500 crore in debt to local lenders.“Shares of Tata Sons have not been pledged against loans. If in the future, SP Group wants to borrow more money, these shares could be considered. But they will not be primary collateral against any bank loan,” a senior official with a public sector bank said. “As of now the group has not sought any fresh loans.”Sources added that the SP Group has pledged about half of its Tata Sons stake as pledge for fundraising made through debentures, the charge of which is held by Axis Trusteeship. Last year, the SP Group had pledged assets of subsidiaries like Forbes and Company, Afcons, SP Imperial and a few other entities to raise fresh working capital support from lenders. Besides, the promoters have also pledged many lands, buildings and personal guarantees as collateral against bank loans.

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