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SP Group sells quarter of its TCS holding

The TCS share-sale is part of SP’s asset monetisation plan to pare its Rs 30,000-crore debt.

Last Updated: Dec 05, 2019, 10.51 AM IST|Original: Dec 05, 2019, 10.51 AM IST
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Sources said Sterling Investment Corporation and Cyrus Investments sold 19.90 lakh TCS shares in the open market last week.
(This story originally appeared in on Dec 05, 2019)
Mumbai: The Shapoorji Pallonji (SP) Group has sold a quarter of its stake in Tata Consultancy Services (TCS) and raised Rs 400 crore, amid credit rating agencies downgrading its debt instruments. The group will use the proceeds to strengthen its balance sheet.

Sources said Sterling Investment Corporation and Cyrus Investments sold 19.90 lakh TCS shares in the open market last week. The two private companies of Shapoor Mistry, chairman of SP Group, and his younger brother Cyrus Mistry, held 73.45 lakh TCS shares (or 0.19 per cent of TCS equity) before the sale. The two now own 53.55 lakh TCS shares (0.14 per cent). The TCS share-sale is part of SP’s asset monetisation plan to pare its Rs 30,000-crore debt.

The construction-toconsumer durable enterprise got the TCS shares because of its 18.38 per cent holding in Tata Sons. As a result, when Tata Sons merged its software services division with Orchid Prints in 2003, SP too became a shareholder. Orchid Prints, later renamed as TCS, got listed in 2004.

An SP Group spokesperson said: “The promoters have periodically infused capital to strengthen the net worth of Shapoorji Pallonji and Co (the group flagship), which will have grown by over 200 per cent in two years. In the last 15 months, the promoters have infused over Rs 2,850 crore into the group. The monetisation of TCS shares is only a small reallocation of capital towards strengthening the group’s balance sheet.”

SP’s financial challenges came to the fore after it sought time to repay dues it owed to group company Sterling and Wilson Solar. Like other construction, infrastructure and realty players, SP too has been hit by the liquidity crisis triggered by IL&FS’s default in September 2018. Raising capital has since become difficult and expensive for developers as non-bank lenders have turned cautious after a series of defaults.
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