<a href="https://www.mid-day.com/business/business-news/article/tata-trusts-against-tata-sons-listing-asks-company-to-explore-other-options-23650608" target="_blank" rel="none noopener">Tata Trusts Chairman Noel Tata</a> on Thursday placed a proposal to provide liquidity of approximately Rs 25,000 crore to the debt-laden Shapoorji Pallonji (SP) Group by buying out a portion of its stake in Tata Sons.
SP group has around 18 per cent stake in Tata Sons, the holding company of the USD 180 billion Tata Group.
<h2>The terms of the proposal</h2>
Tata Trusts said Noel Tata tabled the proposal received from the SP Group regarding monetisation of a portion of the Tata Sons shareholding held by Sterling Investments Corporation Private Limited (SICPL) and Cyrus Investments Private Limited (CIPL).
"The transaction envisages a sale of such number of Tata Sons shares held by SICPL and CIPL as would, at a minimum valuation, as determined in accordance with Rule 11UA of the Income Tax Rules 1962, yield a gross consideration of Rs 25,000 crore," according to a statement from Tata Trusts.
The proposed transaction would be carried out in two tranches over an 18-month period, with Tata Sons initiating a selective capital reduction process through the <a href="https://www.mid-day.com/business/business-news/article/nclt-dismisses-jet-airways-liquidator-plea-seeking-rs-500-crore-from-boeing-23650023" target="_blank" rel="none noopener">National Company Law Tribunal (NCLT)</a>. Selective capital reduction is a restructuring process where a company decreases its equity share capital by cancelling shares of particular shareholders in exchange for payment. Tata Trusts said that the valuation of Tata Shares would be done as per Income-tax fair value.
<h2>Trusts wants to find fair and equitable solution for SP Group</h2>
Besides, Noel Tata asked the board to consider ways of raising the funds, including Tata Sons' internal cash flows, the sale of listed investments, bringing investors into newer businesses and potential offers for sale linked to the listing of some operating companies.
"He requested the Board to take the necessary steps for initiating the NCLT process and authorise the operating team of Tata Sons and the Tata Trusts to continue discussions with the SP Group, and the bankers, and report to the Board," the statement said.
The proposal in the context of meetings and discussions held earlier between Noel Tata, <a href="https://www.mid-day.com/business/business-news/article/tata-sons-reappoints-n-chandrasekaran-as-chairman-for-5-years-tata-trusts-calls-it-illegal-23650511" target="_blank" rel="none noopener">Tata Sons Executive Chairman N Chandrasekaran</a> and SP Group Chairman Shapoor Mistry.
Tata Trusts said the proposed initiative reaffirmed its desire to find a "fair and equitable solution" for the SP Group's Tata Sons holding.
The SP Group has long sought to unlock value from the privately held holding company to support its own debt repayment but it is difficult to monetise the stake because Tata Sons is unlisted.

Shapoorji Pallonji Group currently holds around 18 per cent stake in Tata Sons. Tata Sons is the holding company of the USD 180 billion Tata Group

Tata Sons: Noel Tata tables SP Group proposal to monetise Rs 25,000 crore stake

Moody's raises India's GDP forecast to 7 per cent for FY27; warns of inflation risks 

SP group has around 18 per cent stake in Tata Sons, the holding company of the USD 180 billion Tata Group

Noel Tata tables Rs 25,000-crore Tata Sons stake buyout plan to provide liquidity to SP Group

Trending Stories

Latest Photos

Latest Videos

Latest Web Stories

Mid-Day Fast

Home / Business / Business News / Article / Noel Tata tables Rs 25,000-crore Tata Sons stake buyout plan to provide liquidity to SP Group