Kansagra-Maran SpiceJet deal may land in US court
13 October 2010
A few business associates of Bhupendra Kansagra - the SpiceJet promoter who agreed to sell 7.7 per cent stake in the low-cost airline to the southern media magnate Kalanithi Maran - have moved US courts to stall the transaction.
The bloc of shares is held by Royal Holdings Services (RHSL), a US firm in which Kansagra owns 85 per cent, with the balance held by two other investors. These minority investors have opposed the sale, demanding a higher price.
They stakeholders have alleged that they were not consulted before Kansagra struck the deal with Maran, The Economic Times reported quoting an unnamed source.
Since the SpiceJet shares are held by RHSL, there are legal and technical hurdles in going ahead with the deal without the consent of the two minority shareholders. However, the difficulties faced by Kansagra will not impact the Maran's move to gain control in SpiceJet, as he has has already bought 30 per cent SpiceJet equity from Wilbur Ross, the international investor better known for his stress asset deals.
Kansagra did not respond to queries from ET, but had earlier said that the differences between RHSL shareholders would be resolved soon. An official of the Singapore-based Aquarius Investment Advisor, which is advising the two RHSL investors, confirmed the rift with RHSL. ''The legal proceedings were initiated a month back,'' said an Aquarius official.
While RHSL owns 11.95 per cent in SpiceJet, only 7.7 was put up for sale and the balance is pledged. According to another person involved in the deal, the Securities and Exchange Board of India (SEBI) has asked Maran to explain the delay in sale of SpiceJet shares by the Kansagra camp. The feud between RHSL shareholders could indeed delay the open offer by Maran's company to SpiceJet shareholders, said the person.