New Delhi, Sep 17 — Tata Trusts Chairman Noel N Tata has proposed a plan to provide liquidity to the Shapoorji Pallonji (SP) Group by facilitating the sale of a portion of its stake in Tata Sons, while reiterating the Trusts’ opposition to a public listing of the Tata Group’s holding company.
At the Tata Sons board meeting on September 17, Noel Tata placed before the board a proposal received from the SP Group to sell part of the Tata Sons shares held by Sterling Investments Corporation Private Limited (SICPL) and Cyrus Investments Private Limited (CIPL). The proposed transaction is expected to generate gross proceeds of at least Rs 25,000 crore, based on the minimum valuation determined under Rule 11UA of the Income Tax Rules, 1962.
Under the proposed arrangement, the buyout would be completed in two tranches over an 18-month period. Tata Sons would initiate a selective capital reduction process through the National Company Law Tribunal (NCLT), with the shares to be valued according to the fair value methodology prescribed under income-tax rules.
Noel Tata also proposed that Tata Sons examine multiple options to mobilise the funds required for the transaction. These could include deploying internal cash flows, selling listed investments, bringing investors into some of its newer businesses and potentially listing certain businesses through an offer for sale.
He further asked the board to initiate the NCLT process and authorised the operating teams of Tata Sons and Tata Trusts to continue discussions with the SP Group and its bankers. The teams will subsequently place their findings before the board.
The proposal follows earlier discussions between Noel Tata, Tata Sons Chairman N Chandrasekaran and SP Group Chairman Shapoor Mistry regarding the future of the SP Group’s holding in Tata Sons.
The proposed transaction would allow SICPL and CIPL to sell a portion of their Tata Sons shares sufficient to generate at least Rs 25,000 crore, with the valuation based on the minimum value prescribed under Rule 11UA. The transaction is structured to be completed in two stages over 18 months and would require the selective capital reduction process to be undertaken through the NCLT.