Tata and Mistry’s 70-year-old feud may come to a bitter end as Pallonji Mistry hints at selling his 18% stake

The Mistry family implied its purpose to sell its 18% stake in Tata Sons Pvt after announcing its separation from Tata Group. This could outrage another dispute between the two business Tycoons. 

The Mistry family said on Tuesday that it was time to leave the Tata Group, according to media reports, bringing the 70-year-old partnership to an end.

A previous clash between the two families started four years ago when the board of Tata Sons suddenly removed the younger son of PallonjiMistry, Cyrus from the chairman’s post in October 2016. 

Pallonji Mistry has a net worth of $11.4 billion, operates the 155-year-old Shapoorji Pallonji (SP) Group, an engineering and construction giant based in Mumbai. The family shares the biggest asset of an 18.4% stake in Tata Sons, the holding company of Tata Group, a cooperation of 30 companies with revenues of $113 billion.

The SP Group had 92.8 billion rupees ($1.3 billion) in debts of end-February, according to Care Ratings Ltd. The group-wide debt was calculated by the local credit rating firm to be more than 300 billion rupees as of March 2019.

Shapoorji Pallonji Group wanted to borrow money by using a part of its Tata stake as collateral to overcome the debt. Tata did not agree to such a move because it believed that the shares would end up getting into the hands of the wrong parties. In the continuous battle, Tata told the Supreme Court on Tuesday that it’s willing to buying out Mistry instead if the latter requires the funds. 

To this, the SP group stated, "The action by Tata Sons to block this crucial fundraiser, without any heed for the collateral consequences, is the latest demonstration of their vindictive mind-set. It is with a heavy heart that the Mistry family believes that a separation of interests would best serve all stakeholder groups."

According to media reports, SP Group stated that it will exit the Tata Group, but it “was crucial that an early resolution is reached to arrive at a fair and equitable solution reflecting the value of the underlying tangible and intangible assets.”

Commenting on Mistry’s decision to sell their stakes, Arun Kejriwal, director at KRIS, an investment advisory firm in Mumbai said, “This is the first time the Shapoorji Pallonji Group has expressed willingness to sell Tata shares,” said. The group is in a financial mess. The best option before the group is to sell the stake to the right suitor to tide over the crisis.”


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