Shapoorji Pallonji Group offers bondholders 30 bps fee for fresh extension on Goswami Infratech debt beyond June 30 maturity
Shapoorji Pallonji Extends Bond Maturity as Refinancing Continues
India's Shapoorji Pallonji Group has offered bondholders a 30-basis point fee in exchange for approving another extension on debt owed by its unit, according to sources familiar with the matter. The group is seeking consent to allow Goswami Infratech Pvt. to push back repayment of 143 billion rupees ($1.5 billion) worth of zero-coupon bonds by at least a month beyond their June 30 maturity date.
Pattern of Extensions
This marks the second maturity extension on the same debt instrument. Originally due April 30, 2026, the debt, which carries a very high yield of 20.75%, will now mature on June 30, 2026, with creditors having received a 25 basis point consent fee for agreeing to the earlier extension. The additional 30 basis point offer signals continued challenges in executing the group's broader refinancing strategy.
Refinancing Delays and Market Headwinds
The firm had been forced to seek a two-month extension on repayment of high-yield debt from its original April 30 maturity, as rising rupee hedging costs delayed its refinancing plans. The real estate and civil engineering company has been trying to raise funds to refinance existing debt at a time when its parent group has been struggling with high debt, unable to monetise its large stake in the unlisted Tata Sons, the Tata Group's holding company.
Planned Refinancing Structure
India's Goswami Infratech, a Shapoorji Pallonji (SP) Group unit, is set to complete its large fundraising plan by mid-June, ahead of a month-end deadline to refinance nearly $2.5 billion in debt. Goswami Infratech has now secured commitments from at least five foreign and domestic investors to subscribe to a planned rupee-bond issue.
The company, which has split its fundraising between dollar and rupee bond issues, will raise around 143 billion rupees ($1.51 billion) through a three-year zero-coupon rupee bond issue, arranged by Deutsche Bank, with the firm most likely to pay a yield of 18.95%, with investors mostly consisting of existing ones rolling over their investments.
Credit Rating Pressures
In early May, CareEdge Ratings downgraded Goswami Infratech's bonds to B+ from BB-, citing delays in group-level fundraising. The downgrades reflect the prolonged maturity renegotiations and the illiquidity constraints surrounding the group's core assets.
Investor Composition
Some of the major investors in the rupee bonds include Cerberus Capital Management, Farallon Capital Management, Ares Management Corp, Davidson Kempner and EAAA India Alternatives. Most bondholders are rolling over their investments rather than exiting, indicating continued confidence tempered by elevated yield expectations for the refinanced tranche.