Goswami Infratech Pvt., known for issuing India's largest high-yield rupee corporate bond, has managed to secure a temporary relief from creditors regarding a payment that was scheduled for this month. Sources familiar with the matter revealed that the company received sufficient approval from creditors to postpone the bond payment, with over 90% of bondholders consenting to the proposal through Axis Trustee Services Ltd., the bond's trustee.
Concerns were raised when Goswami Infratech expressed uncertainty about its ability to fulfill a 14 billion rupees ($168 million) payment obligation later this month unless specific conditions were met. In response, the company sought to reschedule the payment deadline to no later than September 30, enhancing its initial proposal to meet demands raised by creditors in exchange for agreeing to the payment extension. Axis Trustee Services Ltd. confirmed its consent to the requests outlined in a letter dated May 18 through a filing on the Bombay Stock Exchange, although specific details of the requests were not disclosed.
The situation highlights the broader risks associated with payment delays, particularly as private credit investors globally show increasing interest in emerging markets like India. The country's attractiveness has been bolstered by Prime Minister Narendra Modi's advocacy for more infrastructure investments, with Goswami Infratech falling under the Shapoorji Pallonji group led by billionaire Shapoor Mistry. The group's portfolio encompasses various projects such as apartments, warehouses, parking spaces, and shops, but it has faced liquidity challenges due to high debt levels pre-pandemic, leading to efforts to divest assets. Despite efforts to seek a response from SP Group's external representative, there has been no comment provided in response to queries from Bloomberg.