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Jignesh Shah-promoted Financial Technologies (FTIL) announced on Tuesday that it would be selling off its entire stake in Singapore Mercantile Exchange, a wholly owned subsidiary based out of Singapore.
The Intercontinental Exchange Group is set to buy it for US$150 million, subject to regulatory approvals, according to an exchange filing.
“FTIL will primarily utilize the amount towards repayment of outstanding debt towards External Commercial Borrowings (ECB) and Foreign Currency Loan (FCL) to Banks subject to regulatory approvals, if any, pursuant to which FTIL will become debt/lien-free,” said the exchange notification.
Singapore Mercantile Exchange (SMX) is a wholly owned subsidiary of Financial Technologies Singapore Pte. Ltd. (FTSPL), which in turn is a subsidiary of Financial Technologies (India) Ltd. (FTIL).
It had average daily turnover of $200 million and average daily volume of 5,614 contracts in FY12-13, according to the last annual report.
The exchange has commodity and currency futures products. This includes gold and silver based derivatives, base metals, black pepper and crude oil futures.
Financial Technologies' exchange ventures include operations in Dubai, Mauritius, Botswana and Bahrain. They include the Dubai Gold and Commodity Exchange (DGCX), Global Board of Trade Ltd. (GBOT), Bourse Africa and the Bahrain Financial Exchange (BFX), according to its website.
NSEL, which is promoted by Financial Technologies, has been involved in a Rs 5,600 crore payment crisis since August. The spot exchange had allegedly been used as a financing platform in which roughly two dozen borrowers raised capital from thousands of lenders. They later defaulted on the same. There have been allegations that the money was funneled into real estate and other businesses. The Economic Offences Wing(EoW) and other agencies have been investigating the matter.
Meanwhile, Shah said he has ‘mixed emotions’ about the sale of an asset he had ‘nurtured as a global showcase of an institution built with Singapore’s world class infrastructure and regulation coupled with Indian technology and expertise.’
The release added that he would be happy to ‘watch it scale new heights with satisfaction from a distance.’
