Gangwal Family To Bail Out Ajay Singh Of Spicejet?
Speculation is rife that billionaire businessman Rakesh Gangwal, who stepped down from the board of Interglobe Aviation and is also exiting his shareholding in the company, will come to the rescue of cash strapped SpiceJet promoter Ajay Singh. It is likely that Gangwal may infuse funds into Spice Healthcare Pvt Ltd., the unlisted company that promotes India's budget airlines Spicejet, sources said.
For the past few days, the share price of Spicejet has been rallying on rumors of deal talks between Gangwal family and Ajay Singh, the sources said. In just two trading days this week, the Spicejet share price rose by more than 25 percent on heavy volumes that were unusually high for the counter.
Two emails sent to Spicejet inquiring about the deal talks remained unanswered. Repeated attempts to seek any denial for the story, if the deal talks were not on, did not yield results. Over the phone, Spicejet spokesperson said he will not be able to comment on the story and did not respond on repeted whatsapp messages as well. An email, whatsapp message and phone call to Spice Healthcare and Spicejet promoter Ajay Singh too went unanswered.
SpiceJet has already announced the issue of 3.4 crore preferential shares and 13.5 crore warrants to Spice Healthcare.
Last year, Gangwal stepped down from the board of Interglobe Aviation, the company that runs Indigo Airlines. Gangwal is also exiting his shareholding from the company and currently, his holding has come down below the 26 percent threshold in Interglobe. Gangwal family is said to have sold Interglobe shares worth nearly Rs 4000 crore in the past few weeks.
The market cap of SpiceJet is around Rs 24,00 crore since the airline went through an acute cash crunch and did not even have money to pay its aircraft leasers. The market-cap of Interglobe is more than a whopping Rs 95,000 crore.
Spicejet has also agreed to pay the entire arbitration award of Rs 380 crore to the airline's former promoter Kalanithi Maran, in a seven-year-old share transfer dispute. Also, the company has issued preferential shares to airlines leasers. Most of the payments will be funded by SpiceJet through the money it gets from the preferential issue of shares to Spice Healthcare. Such vigor and sudden display of financial strength by the promoter group company of SpiceJet has been giving some credence to the speculations, the sources said. Other, the fact that Singh was cash strapped for many years now and could not fund the cash-guzzling airlines, is a story well known.
The writer is author of the book: The Market Mafia - Chronicle of India’s High-Tech Stock Market Scandal & The Cabal That Went Scot-Free. Palak has been a journalist in Mumbai for nearly two decades now. He has worked for most premier pink papers including The Economic Times, Business Standard and The Financial Express and The Hindu Business Line. He was drawn to crime reporting at the age of 19 but a few years in the field told him that the fabric of crime had changed and the organised gangs, as Mumbai had witnessed during the eighties, no longer existed. It was business and markets that dominated the scenario. His passion to unravel the intricacies of the ‘white money’ economy led Palak to the world of finance and regulations.
