ADAG opens renewed talks with Spicejet promoters

Anil Ambani’s ADAG group has begun renewed talks with the Kansagra family which is the highest stake holder in SpiceJet for a stake buyout. The talks began last week after a fresh proposal was made by the ADAG group. The Kansagra family owns 12.89% stake in SpiceJet.
Both parties had a round of talks in April but could not make any headway due to differences over valuations. Talks between the Marans and Kansagra family also could not progress due to valuation differences. Sources close to the negotiations said that the ADAG has offered a higher price this time. During the last round of talks ADAG had offered Rs 40 to Rs 45 per share.Sources said that group was also going to approach WL Ross India with the renewed offer. The ADAG group is interested in picking up 51% stake in the company.
Meanwhile, $80 million of foreign currency convertible bonds invested in 2008 by US investor Wilbur Ross are also due for conversion to equity by December this year, which may give him about 30 percent stake in Spicejet, according to analysts. The biggest problem for Ross is that if he does convert them into equity then it will lead to violation of the FDI cap in aviation. Ross had said earlier that he is open to a stake sale depending on the valuation.
01/06/10 Sameer Hashmi/Economic Times

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Categories: SpiceJet Jun 2010