SpiceJet shares up on reports of stake for Maran | business | Hindustan Times
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SpiceJet shares up on reports of stake for Maran

Following speculation in the media of a possible acquisition, low cost airline SpiceJet saw its share price surges by 3 per cent on the Bombay Stock Exchange. HT Correspondent reports.

business Updated: Jun 12, 2010 02:07 IST
HT Correspondent

Following speculation in the media of a possible acquisition, low cost airline SpiceJet saw its share price surges by 3 per cent on the Bombay Stock Exchange.

6.4 cr shares for Ross, Istithmar

SpiceJet on Friday said it has allotted 6.4 crore shares or nearly 20 per cent stake of the company to fund firms of WL Ross and Istithmar World on conversion of the FCCBs.

SpiceJet said it is allotting 6.4 crore equity shares at a conversion price of Rs 25 a piece, aggregating to Rs 160 crore to the investors upon conversion of FCCBs held by them.

PTI, New Delhi

As per reports, media baron Kalanithi Maran of Sun TV Network Ltd is close to acquiring a 40 per cent stake in the airline from its promoter Bhupendra Kansagra and Wilbur L. Ross for around Rs 800 crore. The airline’s share soared 3.11 per cent to a high of Rs 59.65 on the BSE on Friday.

A SpiceJet spokesperson refused comments saying they had nothing to say on market speculation. SpiceJet is the country’s second largest low-fare carrier. The 5-year-old airline, declared a net annual profit of Rs 61.4 crore for the fiscal year 2009-10.

For the January-March quarter, the net profit was Rs 27.5 crore. Spicejet, in 2009-10 fiscal year, saw a 44 per cent increase in traffic whereas the total air traffic increased only by 16 per cent.

Maran is the elder brother of Union Textiles Minister Dayanidhi Maran. He runs 20 television channels and two newspapers in south India. The two sides have been holding discussions for months.

Ross is likely to convert his foreign currency convertible bonds (FCCBs) into equity shares and will own 27.11 per cent stake in the low-cost airline. Maran is expected to make an open offer to SpiceJet’s minority shareholders to acquire an additional 20 per cent stake in the company.

Kansagra owns around 11.95 per cent in the company through Royal Holding Services Ltd.

Earlier this week, foreign fund house Goldman Sachs Investment Partners Mauritius had picked up 6 per cent stake in SpiceJet by converting the 1.5 crore warrants it had purchased from the airline in December 2008 into equity.