Tata Sons shares are not transferable, says Trusts
Tata Sons shares to refinance over $2 billion debt, Tata Trusts has, for the first time, officially said these are non-transferable. The Trusts, which holds a controlling 66% in group holding company Tata Sons, is worried about possible litigation with lenders over enforcing the security in case SP Group defaults.
«As is publicly known, Tata Sons' shares are not freely transferable,» said Tata Trusts chief executive Siddharth Sharma in response to ET's emailed queries on the Trusts' legal position on the matter.
SP Group, promoted by the Mistry family, has pledged its entire 18.5% in Tata Sons held through two entities to secure monies from private credit funds such as Ares and Farallon. Additionally, it needs to raise funds for a separate repayment due in three months and refinance existing high-cost borrowings.
Lenders are assessing whether the shares can be pledged further as enforceability remains uncertain. They are, however, taking comfort from the fact that the shares have been pledged thrice in the past, said people with knowledge of the matter.
Shapoorji Pallonji Group has also offered additional assets as collateral and is currently in advanced talks with Power Finance Corp (PFC) to raise over $2 billion in debt.
SP Group didn’t respond to queries.
The board of Tata Trusts has been concerned over the rollover of these shares among lenders, said an executive aware of the matter. “There has also been angst over SP Group cashing in on the equity of the Tata Sons shares. But SP Group says they have a
