While the market buzz was that promoters of SpiceJet are planning to dilute majority stake, the media tycoon and the main promoter Kalanithi Maran has decided to increase his stake in the airline by another 5% to infuse around Rs 184 crore.
It will be the third infusion by Maran since September 2011, and the money which will be infused this time is to strengthen the balance sheet and to support fleet expansion, said a senior company official.
Reports have stated that Sun Group's Chief Kalanithi Maran and his wife, Kavery Maran, have resigned from one of the promoter entities of SpiceJet, which triggered the speculation on a possible sale of the Maran family’s majority stake in the airline. However, the Group denied any stake sale, except that it is talking to some private equity players.
Sun Group's Chief Financial Officer SL Narayanan, said: “Even if you assume that they have resigned from another promoter company, it doesn't mean anything.”
Meanwhile, the airline today said that it will take a postal ballot seeking share holder's approval to issue compulsory convertible debentures (CCDs) of an aggregate nominal value of Rs 130 crore and warrants of an aggregate face value of Rs 15 crore to the company's promoter Kalanithi Maran.
Narayanan said, "The fresh infusion by Maran would be Rs 184 crore post the conversion at an average price of Rs 36.18 a share."
Since in April this year, he (Maran) had infused money for a 5% stake, he cannot infuse the money for direct equity as the regulation would not permit, so he opted for indirect stake increase, he said.
Of the total 5%, 3.6% will be debentures and 1.4% will be through warrant. In September 2011, Maran infused Rs 130 crore for 5% stake and another Rs 100 crore in April this year for another 5% in the airline. At present, Maran's holding stands at 16.27% according to the Bombay Stock Exchange.
"The money will be utilised to settle some loans getting partly retired and towards pre delivery payment of additional fleets," said Narayanan.
A notice for postal ballot seeking approval from the stake holders for issuance of CCDs and warrants, stated that it was proposed to allot up to 13 million unsecured CCD of nominal value of Rs 100 each, which aggregates to Rs 130 crore to Kalanithi Maran on preferential basis in one or more tranches, at 14% interest per annum payable monthly up to the date of conversion. The CCDs would be convertible into equity shares within eighteen months from the date of allotment and only after April 1, 2013.
If the CCDs are not converted within the stipulated period then the same shall be automatically and compulsorily converted into equity shares on the last date.
The company also sought approval from the shareholders to allot 15 million warrants with options to allot equivalent number of equity shares of the face value of Rs 10 each of an aggregate nominal amount of up to Rs 15 crore.
Issue price of both the debentures and the warrants would be determined later, according to the company announcement.
The postal ballot notice also seeks shareholder's approval making Kalanithi Maran and his spouse Kavery Kalanithi as directors not liable to retire by rotation (non-rotational directors) and re-designation of S Natrajhen as managing director of the company.