 "money, funds")
Afcons Infrastructure, the construction arm of the SP group, is planning to raise up to Rs 8,000 crore by way of an initial public offer. The proceeds of the share sale will be used by the group to repay debt at the promoter's level. Banking sources said the group is in talks with SBI Capital and ICICI Securities to launch the share sale in the ongoing financial year.
The fund raising for the promoters is crucial as the group is heavily indebted both at the promoter's level and operating companies level. On Monday, Goswami Infratech raised Rs 14,500 crore at a coupon rate of 18.5 per cent -- thus showing the stress at the group.
Bankers said the share sale of Afcons will help the group to ease the stress at the promoter's level. The group is also looking at the option to sell the entire stake in Afcons but there are no takers, said a banker close to the development.
The group was also planning to sell Gopalpur Port to raise upto $2 billion but the transaction has not materialised so far.
The group is also restructuring its operations with SP Construction operating only as the holdco-cum-operating company for the construction business. The real estate as well as other business verticals will be carved out under separate companies, which will also be owned directly / indirectly by promoters.
The restructuring process is likely to release capital in these segments, as well as likely to limit incremental funding requirements in these businesses from SPCPL. This is expected to support SPCPL’s credit quality owing to reduction in consolidated debt, and corporate guarantees, said a rating firm ICRA statement in May this year. In the last three years, the group sold its consumer products firm Eureka Forbes and Sterling and Wilson to repay debt. Banks estimate total consolidated debt of Rs 36,000 crore at the promoters and operating company level.
An email sent to SP group did not elicit any response.
