Objections to stake sale are not valid, says key SpiceJet promoter

Bhupendra Kansagra, the US-based investor in SpiceJet who has decided to sell his entire 12% stake in the airline to Kalanithi Maran, says objections to this stake sale are not valid.

A minority shareholder of Royal Holdings Services (RHSL) — the company which holds 12% equity in SpiceJet and has been promoted by Kansagra — had filed a case in a Nevada, USA, court last month challenging the sale.

The controversy has erupted as Maran struck a deal with SpiceJet promoters (including Kansagra) to acquire 37.7% stake from them and another 20% through an open offer.

“Magnum Capital, the minority shareholder of RHSL, holds just 3% stake in RHSL and has gone to court in the US. But it has no basis for objecting to the sale in India,” Kansagra said, adding that RHSL’s plea to market regulator Sebi to stop the open offer has gone unheeded as it has no basis for the appeal against this sale.

Kansagra also acknowledged that the entire RHSL shareholding in SpiceJet — a little over 12% — would be sold  to Maran.  “The sale should be completed this month. It will take two weeks after the ongoing open offer is closed to complete our part of the deal,” Kansagra said.

Kansagra said he would retain a seat on the board of the airline as a director even though he would cease to be a shareholder in SpiceJet.

To the specific charge levelled by Magnum — that it was not informed of the deal to exit SpiceJet — Kansagra said, “They are in the minority and don’t need to be informed. Sebi is well aware of the legalities, which is why it has not upheld their plea and allowed the open offer process to proceed”.

Meanwhile, a SpiceJet official confirmed there would be a reconstitution of the board of the airline once the open offer is completed.