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 $2.46 billion in debt, according to latest reports. The real estate and civil engineering company has secured commitments from at least five foreign and domestic investors to subscribe to its planned rupee-bond issue. 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 company will raise around ₹143 billion ($1.51 billion) through a three-year zero-coupon rupee bond issue, arranged by Deutsche Bank, as reported by Business Standard. The firm is most likely to pay a yield of 18.95%, with investors mostly consisting of existing ones rolling over their investments. Major investors in the rupee bonds include Cerberus Capital Management, Farallon Capital Management, Ares Management Corp, Davidson Kempner and EAAA India Alternatives. In early May, CareEdge Ratings downgraded Goswami Infratech's bonds to B+ from BB-, citing delays in group-level fundraising.
The dollar tranche will be launched on Friday, followed by the rupee tranche in the upcoming week, according to Business Standard reports. Goswami Infratech's dollar bonds would mature in three years, with a quantum of $950 million and put/call option at the end of the first year. The initial yield is expected at 14.00%-14.50%, with bankers confident of closing the deal within this range. BlackRock, the world's largest money manager, PIMCO, another large global asset manager, and Europe-based LGT Bank had shown interest in investing in dollar bonds, as reported by Reuters.
The fundraising comes at a time when the parent Shapoorji Pallonji Group has been struggling with high debt, unable to monetise its large stake in the unlisted Tata Sons, the Tata Group's holding company, according to Business Standard. The company has split its fundraising between dollar and rupee bond issues to address its debt refinancing needs. Shapoorji Pallonji Group did not immediately respond to Reuters' requests for comment, while Deutsche Bank declined to comment, as reported by Business Standard.
