SpiceJet allots 6.4 crore shares to Ross, Istithmar

Low-budget carrier SpiceJet on Friday announced it would allot 6.4 crore shares (worth 20% stake in the airline) to WL Ross, Istithmar Capital and Goldman Sachs, currently holding foreign currency convertible bonds (FCCBs) in the company. The bond conversion clears the decks for Sun TV promoter Kalanidhi Maran to acquire a controlling stake in SpiceJet. Maran is believed to be holding talks with Ross and the airline's promoters.

SpiceJet informed stock exchanges that it would allot 64 million shares of Rs 10 each to these investors upon conversion of FCCBs held by them. After conversion of bonds, the entities held by Wilbur Ross will be 13%, while the rest will be held by Istithmar. While Spicejet has not disclosed the bond conversion price, Goldman had earlier converted the warrants held by it at a premium of Rs 29.50 a share. The SpiceJet stock closed at Rs 57.30 on Friday on the BSE (^BSESN : 17064.95 +142.87), down 3.11%, while the benchmark Sensex closed 0.84% higher at 17065 points.

WL Ross-controlled entities such as WLR Recovery III, WLR Recovery IV/ESC, India Asset Recovery Fund and WLR/GS have picked up stakes in SpiceJet. SpiceJet promoters led by NRI businessman Bhula Kansagra own 12.8 % in the company. This will shrink to 12% (over half of this stake is pledged) after equity allotment to Goldman Sachs.

Maran is in talks with Kasangra to buy out his share. Among other promoters, Ajay Singh and his family hold 10%.

As reported by FE on Friday, with Maran and SpiceJet promoters resolving differences over valuation, the deal is likely to be concluded in three tranches beginning with Maran buying out 13% stake from London-based Kansagra family and nearly 10% from distressed investor Wilbur Ross. In the other two ftransactions, the media baron would purchase the remaining stake of about 21% from Ross, the person said.

"Based on their request to convert part or all of the FCCBs, SpiceJet has allotted 41.8 million shares to various funds held by WL Ross & Company and 22 million shares to Istithmar," SpiceJet chief executive Sanjay Aggarwal said.