Shapoor Pallonji Mistry-led investment and real estate firm, Goswami Infratech, is reportedly in talks with Deutsche Bank AG to raise up to Rs 2,500 crore in fresh debt to meet obligations on India's largest high-yield rupee corporate bond.
Goswami Infratech had even agreed to sell most of its stake in Gopalpur Ports Ltd. to Adani Ports and SEZ to help itself out of the financial crunch
Shapoor Pallonji Mistry-led investment and real estate firm, Goswami Infratech, is reportedly in talks with Deutsche Bank AG to raise up to Rs 2,500 crore in fresh debt to meet obligations on India's largest high-yield rupee corporate bond.
As per a report by Bloomberg, the Delhi-based company is in talks with its creditors to further delay a missed payment on its Rs 14,300 crore loan due on September 30, while also working with the German lender for new funding. The company is asking for an extension until January 31 to pay Rs 1,800 crore, which is currently due by the end of this month, sources cited in the report said.
The investment company has been grappling with liquidity crisis for quite some time. The company had even agreed to sell most of its stake in Gopalpur Ports Ltd. to Adani Ports and Special Economic Zone Ltd. to help itself with the financial crunch. Goswami Infratech majorly focuses on projects like apartments, warehouses, parking lots and retail spaces.
The delays in repaying the interest and principal have been hanging over the company since last year. Back in May, creditors had agreed to let Goswami Infratech postpone a Rs 14 billion bond payment until September 30.
Many reports even highlighted that investors holding this bond are now considering asking the company for extra benefits in return for agreeing to a possible delay in their payment.
Goswami Infratech's struggle to repay its debt gives out a sign of the bigger risks that global private credit investors face when they invest in emerging markets.
India has become a popular place for these investors, with companies like Cerberus Capital Management, Varde Partners and Davidson Kempner Capital Management looking to expand in the world’s fastest-growing major economy, the report stated. However, once again a case like this has indicated that investing in such avenues comes with its own risks.