Mumbai: Shapoorji Pallonji Group company Goswami Infratech has approached bond investors to tweak a debt covenant to avoid a higher interest outgo.
In mid-2023, Goswami Infratech raised Rs14,300 crore zero coupon bonds maturing in April 2026, offering 18.75% as a redemption premium. These bonds also have a so-called most favoured nation (MFN) clause, which says that if any Shapoorji Pallonji (SP) group affiliate borrows at a higher rate after May 26, 2024, Goswami Infratech will have to offer the same return to its bondholders.
In market parlance, May 26, 2024, is the ‘trigger date’.
Now, Goswami Infratech has sought lenders’ approval to push back the trigger date by about four months to September 30, according to a consent letter issued by Goswami to bondholders on May 10.
The move will help the SP group buy more time to refinance its existing debt without paying a higher interest rate on the Rs14,300 crore bonds due in April 2026.
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SP group did not respond to ET’s request for comment.
The group is in talks with Power Finance Corporation (PFC) to raise nearly Rs15,000 crore in loans by pledging a part of Tata Sons shares as collateral. PFC is seeking legal opinion on whether they can invoke the pledged shares in case of a default, as reported by ET earlier.
As it is, the interest rate paid by Goswami Infratech has risen by 200 basis points beginning January 1, 2024, since one of the covenants pertaining to monetising the port assets was breached. As per the bond clause, the company had to monetise Gopalpur Port by the end of December 2023. However, a deal on the sale of the port to Adani was announced only in the last week of March this year.
The bond terms also stated that the yields will rise by 200 basis points if Goswami Infratech cannot raise money by listing its affiliate company Afcons Infrastructure by June end. As per the terms of the bonds, SP group was to repay a part of its debt by monetising Afcons Infrastructure, which has filed a draft prospectus with the Sebi.
Goswami Infratech is a 50:50 joint venture between SC Finance & Investments(SC Finance) and SP Finance (SP Finance), which are, in turn, promoted by Cyrus Pallonji Mistry and Shapoor Pallonji Mistry, respectively. Goswami acts as one of the investment arms for SP Group.
In a letter to bondholders, SP group has stated the repayment of the debt of Sterling has been delayed beyond May 26 2024, while adding that Sterling, SD Corporation, Evangelos Ventures (EVPL) and its lenders are currently under discussion to extend the tenor of the existing EVPL debentures and SD Corp debentures.
The letter further stated, “As per the ongoing discussion, it is proposed that the tenor of the existing SD Corp Debenture Indebtedness and the existing EVPL Debenture Indebtedness shall be extended up to September 30 2025 and any intermediary interest and coupon payment obligations shall be extended up to September 30, 2024.”
