look news india
Shapoorji Pallonji Group (SP Group) pledged the shares of Tata Sons to obtain a loan of more than $2 billion. Now when the time to repay this loan came, this group had to take a loan again by pledging these shares. In such a situation, Tata Trust has officially announced that the shares of Tata Sons are not transferable. This is the first time that Tata Trust has officially said this. Tata Trust has a 66 percent stake in Tata Sons, the holding company of Tata Juth, so the control of this company is in its hands. The Tata team is very concerned about the legal disputes with the lenders over the transfer of Tata Sons shares in case the SP Group fails to repay the loan taken.
Reacting to an English newspaper, Tata Trust Chief Executive Siddharth Sharma said that it is well known that Tata Sons shares cannot be transferred at will. The SP Group, promoted by the Mistry family, has an 18.5 percent stake in Tata Sons through its two companies. The group has secured a large amount of financing from two private credit funds, Ares SSG and Farallon Capital, to close the stake. This loan comes at a very high interest rate. Now the repayment period of this loan is coming closer. Therefore, the group wants to obtain financing by pledging these shares again for this repayment.
To get this loan, SP Group has approached other loan lending companies. However, if the group fails to repay, these lenders are at a loss as to how to recover the loan from the seized shares, because if the shares cannot be transferred to another name, recovery cannot take place. However, the lenders may decide to increase the loan considering that SP Group has pledged these shares thrice before.
Tata Group is against share transfer in view of SP Group's compulsion?
SP Group has taken a huge loan by pledging the shares of Tata Sons, which has to be repaid. Currently, the group has low cash flow, so it has to pledge the shares again to repay the loan. In such a situation, Tata Trust, which has a controlling stake in Tata Sons, has officially said that the shares of Tata Sons are not transferable.
