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


October 1, 2020

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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.

imageA 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.