Noel Tata, Shapoorji discuss share swap for Tata Sons stake sale

Tata Sons and the Shapoorji Pallonji Group are in discussions to explore share swap proposals for unlocking liquidity, according to sources. The Shapoorji Pallonji Group, seeking funds to repay costly debt, is interested in exchanging shares of its stake in Tata Sons for shares in companies like Tata Power Co. Representatives of Noel Tata, patriarch of the Tata family, are considering the possibility of a share swap where the SP Group receives Tata Power Co shares in exchange for their 18.4% stake in Tata Sons Pvt.

Other options include a direct buyout by Tata Sons or a sale to an external investor, preferably a global one. A resolution could benefit investors in the Shapoorji Pallonji Group's debt, including Cerberus Capital Management LP, Davidson Kempner Capital Management, and Farallon Capital Management. Noel Tata, chairman of Tata Trusts, is the key figure in driving a potential settlement, as he is set to step down as Tata Sons chairman in February.

The structure of the transaction is yet to be decided, with legal aspects and regulatory issues to be evaluated. The talks must conclude within 18 months, as the recently closed bond issue by SP Group will require its first payout in July 2028.