Now Reading: Tata Group, Shapoorji Pallonji in share swap talks for Tata Sons stake
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Tata Group, Shapoorji Pallonji in share swap talks for Tata Sons stake
Tata Group, Shapoorji Pallonji in share swap talks for Tata Sons stake
The Tata Group is in talks with the Shapoorji Pallonji (SP) Group over a potential share swap or buyout of SP's 18.4% stake in Tata Sons, sources said. Under one option, SP…
The Tata Group is in talks with the Shapoorji Pallonji (SP) Group over a potential share swap or buyout of SP's 18.4% stake in Tata Sons, sources said. Under one option, SP would receive shares in listed entities such as Tata Power in exchange for its holding in the privately-held Tata Sons. A direct buyout by Tata Sons financed by overseas banks, or a sale to an external global investor, are also being considered.
Noel Tata, chairman of Tata Trusts which owns 66% of Tata Sons, is driving the negotiations. The SP Group, led by Shapoor Mistry, needs funds to repay costly debt. A resolution is expected within 18 months, ahead of the first payout on SP's bond issue maturing in 2028. Any deal would require agreement on valuation of Tata Sons, which controls unlisted businesses including Air India and Tata Electronics. Representatives of both groups declined to comment.
Indian Opinion Analysis
The SP Group's 18.4% holding in Tata Sons has been a source of legal and financial friction since the 2016 boardroom battle that ousted Cyrus Mistry as chairman. The stake is valued at roughly Rs 1.5 lakh crore by some estimates, but the valuation of unlisted Tata Sons, with its airline and electronics ventures, remains a sticking point. SP Group's high-cost debt, including bonds at nearly 19%, makes a quick resolution urgent. The Reserve Bank of India's 2016 rules on upper-layer NBFCs also pressure Tata Sons to list, adding regulatory impetus. The outcome will hinge on whether the Tatas accept a share swap that dilutes listed-entity holdings or raise overseas financing for a cash buyout. The next milestone is SP Group's first interest payment in July 2028.
Source: timesofindia.indiatimes.com
This brief was synthesised by AI from the source linked above.
