Thursday, July 06, 2017

Revealed: Ajay Singh Took Over SpiceJet For The Princely Sum Of Rs 2

Never before in India Inc.’s M&A history has a listed company been sold for less than Rs 5, the deal closed in 15 days and the acquirer exempted from the mandatory open offer to public shareholders.
This was the luck that backed Ajay Singh’s acquisition of then beleaguered SpiceJet Ltd., one of India’s three listed airlines.
SpiceJet has turned around since co-Founder Singh returned more than two years ago. Not many know though, how much he paid to take control of the budget carrier.
Rs 2 Or 3 U.S. cents. That’s what Singh shelled out to buy a 58.46 percent stake in SpiceJet from then promoter Kalanithi Maran and his investment company Kal Airways Pvt. Ltd. in January 2015, according to disclosures made in the Delhi High Court's judgement in a dispute between the two over convertible securities.
At the then prevailing price of Rs 21.8 per share, Maran’s stake was worth Rs 765 crore before he sold it to Singh, the disclosure said. The stock has since risen to Rs 125. Which means, Singh’s holding in SpiceJet is now worth Rs 4,400 crore.
Curiously, none of this information was disclosed by Singh, SpiceJet or Maran at the time of the transaction. Neither did market regulator Securities Exchange Board of India insist on a disclosure, allowing this to be the first-ever acquisition of a listed company with no price disclosure and at a 100 percent discount to its share price.
It is only now that this information has accidentally come to light as Maran battles Singh in court for failing to meet a deal condition. BloombergQuint's emailed queries to Singh and Maran to confirm the valuation remained unanswered.
06/07/17 Sajeet Manghat/Bloomberg Quint