Spice buys 51% in Wall St Fin; offer today

Spice Investments and Finance Advisors Pvt Ltd has picked up a 14.32% stake in Wall Street Finance, the non-banking finance company that’s into money remittance business.

Spice also picked up 36.58% stake held by Transways Combines, a unit of Wall Street Finance, through an off-market deal, taking its own stake in Wall Street Finance to 51%.
Wall Street Finance was earlier set to be bought by Reliance Money when the Anil Dhirubhai Ambani company picked up 33.55% stake in October 2008.

This was later raised to 36.58% through open market share transactions. But Sudip Bandyopadhyay, the CEO of Reliance Money who was steering it all, did not take the deal forward. Instead, he resigned from the company in April.

Reliance Money then decided to roll back the deal. Transways then bought the shares back from Reliance Money through block deals on September 3. Interestingly, Bandyopadhyay is expected to join Spice Finance, the non-bank flagship of  the  B K Modi Group, to run the remittance business.  

Bandyopadhyaya, however, denied such a move.Bandyopadhyaya, however, denied such a move. “I know the Patels very well and keep talking to them, but there is no plan to join Spice,” he told DNA Money on Monday.

In all, 16,64,605 shares of Wall Street Finance were acquired on Monday at Rs 55 each.
Of this, Patel Holdings sold 12,41,000 shares while promoter Arif Asghar Patel sold 4,23,705 shares. Arif Patel was unavailable for comment. Enam Securities was the merchant banker to the deal.

Patel Holdings is the holding company of the Patel family, which also has a significant stake in Patel Integrated Logistics, one of India’s largest fleet operators. Spice is expected to make an open offer for an additional 20% stake in Wall Street Finance immediately thereafter.

Divya Modi, executive director of Spice Finance, the flagship non-banking firm of the group, and daughter of B K Modi has for some time been wanting to enter the remittances business.

At the time of launch of a private equity fund with 3 Degrees Asset Management of Singapore on June 1 this year, she said Spice Finance will invest Rs 500 crore in distressed assets and special situations, as well as other niche businesses such as remittances and over-the-counter exchanges.

“Our strategic alliance with 3 Degrees is the first significant step in our goal to achieve a $1 billion valuation for Spice Finance within the next few years,” she had said.