Mistry group seeks to raise up to $1 billion pledging Tata Sons stake

Mistry, whose son Cyrus was ousted as chairman of Tata Sons in 2016, is the biggest single shareholder in India's largest conglomerate.

The Shapoorji Pallonji Group, controlled by billionaire Pallonji Mistry and his family, is in preliminary discussions to borrow as much as $1 billion to repay maturing debt using part of its stake in Tata Sons as collateral, said people with knowledge of the matter.

Mistry, whose son Cyrus was ousted as chairman of Tata Sons in 2016, is the biggest single shareholder in India's largest conglomerate, and is seeking a loan as the coronavirus outbreak delays a plan to sell assets, the people said, asking not to be identified.

Mistry is trying to use his 18 per cent stake in Tata Sons, which is estimated to be worth as much as $14 billion, as the Covid-19 pandemic stalls economic activity across the world. However, he may face a hurdle: the shares in the unlisted Tata holding company are closely held and illiquid. A legal battle between Tata Sons and Cyrus Mistry following his ouster may also deter potential creditors.

A representative for Shapoorji Pallonji Group declined to comment.

Mistry's Shapoorji Pallonji & Co had Rs 9020 crore ($1.2 billion) of debt as of September 30, according to rating assessor ICRA. The company planned asset sales, including solar power plants and road assets, in a bid to reduce debt by as much as Rs 4,000 crore, a person with direct knowledge of the matter said in August.

Founded in 1865, the Shapoorji Pallonji group, which has built some of Mumbai's landmarks, including the RBI building, is still better placed than most of its corporate peers, with total revenue of $7 billion for the year ended March 2019.