MUMBAI, AUG 28, 2005
PIYUSH PANDEY
The Financial express
Even as the promoters
of SpiceJet are engaged in a court battle over ownership
of the company's shares, the company has decided to
raise $300 million by way of either foreign convertible
currency bonds (FCCBs) or dilution of shares to fund
its expansion plans. Earlier, the promoters were planning
to fund the company's fleet expansion by raising $90
million through FCCBs, but when talks with the Hindujas
over sale of a part of the company's stake progressed,
SpiceJet postponed the FCCBs issue.
However, the option of allowing a third party
to pick up S K Modi's stake in the company came to
an end, with Aspi Chenoy, the counsel of Kansagara
brothers, SpiceJet's NRI promoters, committing in
the Mumbai High Court not to transfer the shares belonging
to Mr Modi to a third party. SK Modi holds 17% stake
in Spice Jet.
"We would need around $300 million to fund our
expansion plans. Our company is doing well and we
have received many offers, we are open to the offer
of selling stake in the company, if we get strategic
value for our company. We could also opt for FCCB
route. We would be raising the required money in next
couple of weeks." Ajay Singh managing director,
SpiceJet told FE.
Fund Flow
• $300 m to be raised through FCCBs or share
dilution
• Funds required for expansion of fleet
• Funds to be raised in a couple of weeks' time
• SK Modi's 17% stake to be left untouched
When asked about SK Modi's holding in the company,
Mr Singh said, "SK Modi group does not have any
stake in the company and have no role in the company's
management All their shares are pledged to various
companies for clearing their existing dues. Mr Modi
was aware of all the developments and now he is trying
to create problems, when the company's share is traded
at Rs 80 on the stock exchanges. If he got the shares
of the company, why is he not selling them?"
Ajay Singh holds three crore preferential shares and
warrants of the company amounting to Rs 30 crore.
The Hinduja group had earlier come close to striking
a deal with the Kansagras. Both the parties had several
rounds of negotiations in Geneva and London and a
final decision was expected soon. However, with Modi
moving court, there were doubts whether the company's
expansion plans would actually take off, as it was
looking for fresh infusion of funds and a new owner
to take it further. S K Modi refused to comment about
the development stating that the court has refrained
him from talking to the media.
