Thursday, January 11, 2007

Texas Pacific pulls out of investing in SpiceJet

Private equity giant Texas Pacific Group is pulling out of its $30 mn investment in low-cost airline SpiceJet. Reasons cited are as varied as differences over valuation to the US-based fund having expressed its inability to participate in this round of fund-raising by the low-cost carrier as its top management was busy with an ongoing $11 bn deal for buying out Australian airline, Qantas, by a consortium of private equity players.

In its current round of fund raising, SpiceJet has raised around Rs. 300 crores by divesting around 25% stake, giving the company a valuation of around Rs. 1200 crores. The Tata Group, through two of its investment arms, is picking up 7% stake for Rs. 75 crores. Existing shareholder, Istithmar, Dubai government’s private equity arm, is putting in another $25 mn for increasing its stake from 3% to 11%. BNP Paribas will invest $15 mn for a 4% equity stake, while Goldman Sachs is picking up 1.5% stake for around $5 mn. A clutch of small investors will hold another 4% stake between them.

The company is holding its EGM on Thursday to ratify the preferential allotments. The shares were offered at an average price of Rs. 51.36 per share. After this round of dilution, the stake of the promoters including those of the UK-based Kansagra family, director Ajay Singh and associates, will come down from around 18% to 15%.

Read more in The Economic Times article.

No comments: