Will Tata Sons, Tata Trust pay Rs 90,000,000,000 to THIS company to buy...?

After Ratan Tata's half-brother, Noel Tata, became the Chairman of Tata Trusts, the Tata Group and Shapoorji Pallonji Group (SP Group) decided to bury the hatchet. Tata Trusts and Tata Sons have offered the SP Group to buy its 6 per cent stake in the Tata Group for the whopping amount of Rs 90,000,000,000 or Rs 9,000 crore, so that the tug of war for the control of the salt to software conglomerate comes to an end. This may be a win-win offer as the SP Group needs money desperately as it is under the debt burden of Rs 30,000 crore. 

Will SP Group sell 6% stakes in Tata Group?

The SP Group has 18 per cent stakes in the Tata Group, and it wants to keep at least a part of it so that it could continue receiving the dividends that the Tata Group companies give to their shareholders almost every year. It can enjoy the dividends as well as repay its debt by offloading about 12 per cent to 14 per cent of its shares in the Tata Group. 

How much will Tata Trusts pay to bail out SP Group?

The Tata Trusts have 66 per cent of Tata Sons. However, it has been roiled by differences between two sections of the trustees, paving the way for government intervention. Tata Trusts Chairman Noel Tata, Tata Sons Chairman N Chandrashekar, chairman emeritus Venu Srinivasan and Darius Khambata, a lawyer and trustee on multiple Tata trusts, are most likely to meet the government officials to sort out the differences. 

The meeting is crucial as the government does not want an example of loan failure being set and that too from a big and reputed corporate house like the SP Group. It wants to ensure that there is no loan default and it has helped channelize a reasonable part of finance. Tata Group can pitch to bail the SP Group out while increasing its shares in the Tata Group.