NEW DELHI: Three months after acquisition of the SpiceJet airline, the Civil Aviation Minister has finally shed some light on the deal though did not disclose the amount and its modus operandi.
Spicejet had grounded operations briefly in December last year citing no cash to pay to the oil companies following which businessman Ajay Singh acquired 58% equity of the ailing airline from the promoters (the Marans) for an undisclosed amount.
He had also committed to invest Rs 1500 cr to revive the fortune of the airline. However, there was no information as to why was there no public offering for the sellout.
What made the Minister to make a statement now that Sebi had written a letter for the waiver of the public offering? His statement came after senior BJP leader Subramanium Swamy’s letter to the PMO raising doubts over the deal and a demand for proper investigation into the entire incident.
What Swamy says:
1) That the share sale transaction was done at “arbitrarily low and dud prices”. In an interview to The Hindu Business Line, the Sun Group CFO S L Narayanan had said in January that the promoters (Marans) “will be incurring a substantial capital loss on the transfer of these shares. However, since the Group will continue to hold about 18 crore shares at a strike price of Rs 16.30 per share that underlie the warrants, there is a reasonable chance that we will make some gains if the stock price moves up in the near future with improving prospects for the sector.”
2) The absence of an open offer by the new promoter after acquiring the shares and market regulator Sebi’s silence over this. On his part, Singh has been quoted as saying that an open offer would be launched if Sebi were to tell him to do so.
3) Swamy has sought an ED probe into the entire share transfer deal of SpiceJet, saying: “if the idea was to protect the assets of bankrupt airlines, SpiceJet could have been taken over by Air India rather than allow a bankrupt private party to trade in share with impunity.”
Now that the minister has been compelled to admit that Sebi did waive an open offer, perhaps Swamy’s continued threats may also compel him to reveal the price at which the Marans sold out.
