Loose ends abound in Maran-SpiceJet deal

Mumbai: The buzz about Kalanithi Maran buying stake in SpiceJet— the story broken by DNA —is getting shriller.
But pending a formal announcement, there are many cobwebs that need to clear.
First, while reports peg the stake being acquired at 40%, some analysts say it is closer to 35% following equity expansion in the company.
According to the analysts, SpiceJet’s equity base has swollen from 24.1 crore shares to 32.1 crore shares after the entry of three new shareholders — Goldman Sachs, which holds 4.8% stake at an average cost of Rs40 per share after conversion of warrants worth $20 million on June 8; Istithmar PJSC, the investment arm of Dubai World, which holds 7% stake at Rs25 per share after conversion of $12 million worth of foreign currency convertible bonds (FCCBs) on Friday; and Wilbur Ross, who holds 14% stake at an average of Rs25 per share after conversion of $23 million worth of FCCBs, also on Friday. In fact, Ross held $68 million worth of FCCBs due for conversion in December at Rs35 per share.
Of this, $23 million has been converted ahead of time.
The latest conversions saw Goldman Sachs’ stake in SpiceJet fall from 6% to 4.8% even as the holding of promoter Bhupendra Kansagra through Royal Holding Services Ltd dropped to 9.6% from 12.89% earlier.
It is believed that if Maran buys the stake of Goldman Sachs, Istithmar, Kansagra and Ross, he would acquire 35.2% stake at a cost of at least Rs 40 per share, thus triggering an open offer.
12/06/10 Neha Rishi/Daily News & Analysis

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Categories: SpiceJet Jun 2010