Tycoon Mistry’s SP Group weighs $2 billion asset sales

Bharat Electronics

According to persons familiar with the situation, the Shapoorji Pallonji Group, owned by billionaire Shapoor Mistry, is considering asset sales including a controlling interest in its marquee engineering company that could raise around $2 billion.
According to the persons, the corporation is seeking a buyer for its investments in Afcons Infrastructure Ltd., a Mumbai-based infrastructure building company. According to the persons, SP Group is also looking to sell a few ports, but they asked to remain anonymous because the information is private. According to one of the sources, SP Group may be interested in selling some properties, including Gopalpur Port on India’s east coast.
The people stated that because the decision-making process is still in its early stages, SP Group may elect to keep the assets longer. A SP Group spokesman was unable to immediately comment.
The 1865-founded SP Group constructed opulent hotels, stadiums, palaces, and industries throughout Asia, notably Mumbai’s Taj Mahal Palace hotel’s historic Tower Wing and the Reserve Bank of India structure. According to their website, Afcons specialises in engineering and construction, including marine infrastructure, tunnels, bridges, and roads. More than 25 countries in Asia, Africa, and the Middle East are the locations of its projects.

In the course of three months last year, the Mistry family lost two of its most important members. The founder of SP Group and Shapoor Mistry’s father, Pallonji, passed away at the age of 93 in late June. Early in September, Shapoor’s younger brother Cyrus Mistry perished in an automobile accident. According to the Bloomberg Billionaires Index, the majority of the family’s $29 billion wealth is generated from an approximately 18% shareholding in Tata Sons Pvt., the principal holding company of India’s global conglomerate Tata Group. However, their ownership in Tata Sons, which accounts for 90% of the family’s wealth, is frozen out due to an ongoing dispute with Tata Group.

The SP Group is being rattled by rising borrowing rates, so Shapoor Mistry has been looking for methods to free up cash. Last year, SP Group divested Sterling and Wilson Renewable Energy Ltd. to Reliance Industries Ltd. and sold water purification equipment manufacturer Eureka Forbes Ltd. to Advent International in a 44 billion rupee ($536 million) deal. After the sales, the business ended its debt recast programme and paid back its lenders $1.5 billion.

The Economic Times reported last week, citing unnamed sources with knowledge of the situation, that SP Group is in discussions to raise $1.75 billion by pledging the remaining half of its stake in Tata Sons. According to the article, the corporation intends to use the money to pay off debt and inject capital into its operational businesses.