SP group firm's high yield debt sees second downgrade in 4 months
Subscribe to enjoy similar stories. Mumbai: The financial woes of the Shapoorji Pallonji group seem to be worsening with CARE Ratings further downgrading the credit rating of its group company Goswami Infratech Pvt Ltd in a span of 4 months. Rating on these non-convertible debentures (NCDs), issued last year, has been downgraded to Care BB- with negative outlook from Care BB, the rating agency said on 28 September.
"The revision in rating assigned to Non-Convertible Debentures of Goswami Infratech Pvt Ltd (GIPL) takes into account delays in fund raising at the group level, as against earlier envisaged timelines, which has thereby resulted in heightened refinancing risk associated with the NCD repayment," said Care in its note. The rating downgrade comes after the SP Group breached covenants for the third time on the ₹14,300 crore bonds sold by Goswami Infratech last year. This forced the conglomerate to seek a further extension of the ₹1,800 crore interest payment due on 30 September to 31 December 2024.
The conglomerate had breached the covenant in January and April this year. "The group is at an advanced stage of refinancing the borrowings at SICPL level. Thus, in the interim period, to align with the refinancing, the company has sought the extension for MFN Trigger event from 30 September 2024 to 31 December 2024 which has been approved by the investors ahead of the due date," said the rating agency.
The SP group had issued these NCDs last June to raise ₹14,300 crore. The rupee-denominated NCDs mature in April 2026 at a redemption premium of 18.75%. Investors like Cerberus Capital, Varde Partners, Canyon Capital, Davidson Kempner, as well as existing lenders Deutsche Bank, Edelweiss Special Opportunities Fund and Ares
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