India's Shapoorji Pallonji Group has raised $650 million through its debut dollar debt issue, completing the dollar tranche of a delayed dual-currency bond fundraising, three sources aware of the matter said on Thursday. Mercury Finance, an SP Group company, sold three-year dollar securities at a yield of 14.50%, with an option to redeem them after one year, Reuters reported last Friday.
Get the latest news from India and how it matters to the world with the Reuters India File newsletter. Sign up here. BlackRock, the world's largest asset manager, subscribed to these bonds while Deutsche Bank acted as sole arranger and was also among the major investors in the issue, the sources said. Other investors included AllianceBernstein, Goldman Sachs Asset Management and U.S.-based hedge fund Centiva Capital, the sources added. The sources declined to be named as they were not authorised to speak to the media.
Eqyizen Investment, another SP Group company, is issuing three-year zero-coupon rupee bonds at a yield of 18.95% to raise the remaining funds, according to a term sheet seen by Reuters earlier this month. The rupee bond is secured against the group's stake in Tata Sons, held through subsidiary Cyrus Investments, the term sheet showed.
The debt issue forms part of a wider refinancing plan, which has been delayed several times since the start of the year due to uncertainty over whether SP Group could unlock value from its holding in unlisted Tata Sons, in which it is a large shareholder, according to the sources.
Under the revised proposal for the debt issue, within 18 months of the securities being issued, Tata Sons must either be listed or an arrangement must be made to allow SP Group to sell its Tata Sons shares privately at a mutually agreed price. The proceeds would be largely used to refinance existing debt.
In June 2023, Goswami Infratech, another SP Group company, raised 143 billion rupees through zero-coupon bonds, selling them to foreign private credit funds at a yield of 18.75%. The company extended the maturity of those notes twice, most recently to July 31 from June 30.
