Maran set to pilot SpiceJet

Mumbai: Media baron Kalanithi Maran of Sun TV Network Ltd is set to buy 38 per cent stake in India’s second largest low-fare carrier, SpiceJet, from Bhupendra Kansagra and W L Ross, one of the world’s biggest distressed asset specialists.
The deal is expected to be at Rs 45-48 per share — after a discount to SpiceJet’s current market price at Rs 56.05 a share — and will close over the weekend, said sources associated with the ongoing negotiations.
The move will also trigger the open offer code for an additional acquisition of 20 per cent of SpiceJet, after which Maran will firmly be on the driver’s seat of the airline.
For the last two days, SpiceJet stock has fallen 3.61 per cent but the Sensex has climbed back 2.44 per cent.
On Friday, SpiceJet’s existing financial investors, W L Ross and Istithmar Capital, converted a substantial chunk of the bonds they held in the airline. Ross had bought the convertible bonds of SpiceJet in July 2008.
In a statement to the stock exchanges today, SpiceJet said it is allotting 64 million equity shares of Rs 10 each to these investors upon conversion of the foreign currency convertible bonds (FCCB) held by them.
The 64 million shares would amount to a 19.87 per cent stake, after taking into account equity capital dilution upon conversion of bonds including those held by Goldman Sachs, which has around 6 per cent stake. The entities held by Wilbur Ross would get a 13 per cent stake while the rest will be held by Istithmar.
While SpiceJet has not disclosed the conversion price of the bonds, sources said the conversion took place close to Rs 25/share range, giving them a profitable exit route in favour of Maran.
12/06/10 Business Standard

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Categories: SpiceJet Jun 2010