Goswami Infratech gets nod to delay payment due this month: Report

Goswami Infratech Pvt., issuer of India’s biggest ever high-yield rupee corporate bond, has won a temporary reprieve from creditors on a payment that was due on the note this month, according to people familiar with the matter.
 

The company has received sufficient creditor backing for a proposal to delay a bond payment, according to the people familiar who asked not to be identified. More than 90% of bondholders have sent their consent to Axis Trustee Services Ltd., the bond’s trustee, meeting a threshold to pass the proposal, the people added.

Goswami Infratech had said it may not be able to pay 14 billion rupees ($168 million) that may come due later this month if certain terms aren’t met, and effectively asked to push that back to no later than Sept. 30 in a proposal earlier this month. It sweetened the offer after creditors raised demands in order to agree to the payment delay.

 

Axis Trustee said in a filing on the Bombay Stock Exchange that it has granted consent to the requests set out in a letter dated May 18, without disclosing details of the requests.

The firm last year sold India’s biggest high-yield bond, which offered a juicy 18.75% yield, for 143 billion rupees. Private credit investors have been among holders of the bond, including Cerberus Capital Management LP, Varde Partners LP and Davidson Kempner Capital Management LP. Others have included Canyon Capital, Edelweiss, Deutsche Bank and Standard Chartered Bank.

The episode underscores broader risks posed by payment delays as global private credit investors flock to emerging markets. India has been among hot spots in Asia, and Prime Minister Narendra Modi — whose party is currently contesting parliamentary elections — has fueled interest by pushing for more infrastructure investment. 

Goswami Infratech is an investment company within the Shapoorji Pallonji group under billionaire Shapoor Mistry. Its projects include apartments, warehouses, parking spaces and shops. The group has suffered from liquidity crunches after it piled on debt before the pandemic, which has forced it to attempt to offload assets.

An external representative for SP Group didn’t respond to Bloomberg’s requests seeking comment.