SpiceJet Ltd has informed the exchanges today that Wilbur Ross and Istithmar World PJSC are converting the bonds held by them in India’s second largest low-fare airline into equity shares.
Spicejet is allotting a little more than 64 million equity shares of Rs. 10 each in the company to the investors upon conversion of the foreign currency convertible bonds (FCCB) held by them.
This comes a day after VCCircle reported that Sun TV Networks honcho Kalanithi Maran may be close to picking up a substantial stake in SpiceJet by acquiring the stake held by WL Ross through convertible instruments.
Various entities controlled by WL Ross like WLR Recovery III (India) Limited, WLR Recovery IV/ESC (India) Limited, India Asset Recovery Fund Limited and WLR/GS (India) Limited have picked up stake in Spicejet. Istithmar, the Dubai government’s private equity arm, has converted its bonds through Istithmar World PJSC. The conversion price of the bonds was not disclosed. The share prices of Spicejet were trading at Rs 58.1 at 11.45 am today, up by 0.43%.
The 64 million shares would amount to a 19.87% stake, after taking into account equity capital dilution upon conversion of bonds including those held by Goldman. The entities held by Wilbur Ross would get a 13% stake while the rest will be held by Istithmar.
In 2008, WL Ross, a turnaround artist, had subscribed to convertible bonds worth $80 million in Spicejet. If Ross converts all his bonds in Spicejet, he is expected to have around a 30% stake in the company.
Goldman Sachs recently picked up around 6% stake in Spicejet by converting warrants into equity. The warrants were converted into 15 million equity shares of Rs 10 each at a premium of Rs 29.5 a piece.