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    Tata Sons offers to buy out Shapoorji Pallonji Group's stake in shares dispute

    Synopsis

    A lawyer representing Tata Sons Pvt. informed the Supreme Court Tuesday of the offer to purchase the 18% stake owned by the cash-strapped Shapoorji Pallonji Group if the latter needed to raise money for paying maturing debt.

    Tata and Mistry may part ways after 70 yrs; experts say this is the only practical solution
    Tata Sons has offered to buy out Shapoorji Pallonji group's stake in the holding company to help the group raise money to pay its debt. The Supreme Court has also barred the Mistry group from pledging or selling any Tata shares until October 28, when it starts hearing final arguments in the case.

    A Tata Sons lawyer informed the SC of the offer to purchase the 18% stake owned by the cash-strapped Shapoorji Pallonji Group to raise money for paying maturing debt. The SP Group has pledged the shares to borrow funds, a move that was objected to by the Tata group .

    Tata Sons had asked the Supreme Court to invalidate the pledging of Tata Sons shares by the Shapoorji Pallonji Group in favour of Axis Trustee Services and IDBI Trusteeship Services. On September 5, Tata Sons moved the Supreme Court challenging these pledges — that were created in December 2019 and April this year — as well as a fresh move by the Mistry family-owned SP Group to pledge shares in favour of Canadian PE firm Brookfield Asset Management.

    The embattled SP Group has raised Rs 5,000 crore by way of debentures against pledges in favour of Axis and IDBI — a fact not reported previously. Cyrus Investments has pledged almost 82% of its holding in Tata Sons in favour of Axis Trustees to secure debenture funding of Rs 825 crore, which was later modified to a total amount of Rs 3957.84 crore in April 2020, said the Tata Sons plea in the SC.

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    27 Comments on this Story

    Maheshanand 33 days ago
    The Supreme Court’s order curtailing the SP family’s ability to raise fresh funds against its stake in Tata Sons became the turning point for decision in favor of formal separation. However, this appears to be the most prudent decision in given circumstances. It remains to be seen that how much more time would it take to fructify.
    Suresh Kamath33 days ago
    TATA SONS surely would be Glad to Buy out SP Group shares and CLOSE their Relationship and such bickering going on DOES NOT augur well for either Group and better EXIT the SHOW for good of ALL Stakeholders
    Hemant Pisat33 days ago
    Despite Chandra at helm, TATA group is far from its miseries still. SP Group will be pain to manage, disengaging would be ideal, buying out would cost but buying could be necessary. Many groups businesses are bleeding profusely, which were backward or forward integrations that didn't make flush of money. Hence it's becoming tougher for them to become globally competitive enterprise.
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