SpiceJet to be owned 24% by Kalanithi Maran and his KAL Airways, subject to regulatory approval

NEW DELHI: Kalanithi Maran, the former owner of SpiceJet, and his KAL Airways will own around 24% in low-cost airline SpiceJet, subject to regulatory approval, after the counsel of current owner Ajay Singh told the Delhi High Court that the two parties will resolve a dispute over the issue of convertible warrants.

The court will pass an order on Tuesday asking the two sides to resolve the matter by seeking the approval of the Securities and Exchange Board of India (Sebi) and the BSE. Kalanithi Maran, who sold the airline to Ajay Singh after it plunged into a financial crisis in December 2014, had last week dragged Singh to court over nonissuance of the warrants.

On Monday, Singh's counsel told the court that the SpiceJet board will pass a resolution within three days to jointly approach Sebi and BSE to approve the allotment of 18.91 crore warrants to Maran and KAL within two weeks. The allotment of the warrants was approved by shareholders in a meeting held on September 18, 2014, when Maran was still promoter.

The warrants were to be allotted Maran and KAL in various tranches and are convertible to an equivalent number of equity shares at Rs 16.30 apiece. SpiceJet shares are now trading at around Rs 60. In its observation on Monday, the court asked SpiceJet to seek regulatory approval on the terms passed by the board meet on September 18, 2014. ET has reviewed a copy of the draft board resolution that Spice-Jet presented to the court on Monday.

A SpiceJet spokesman said the airline has been pursuing this matter before the BSE and Sebi jointly with the representative of Maran and KAL Airways and the matter is pending with Sebi. "The issuance of warrants was to be made subject to regulatory approvals and could not be issued due to non-receipt of the same," he said.

Though Maran and Singh have agreed to bury the hatchet on warrants, the issue of 370 crore preference shares to Maran remains a bone of contention. The court will hear the matter on April 7.

The airline plunged into a crisis due to an acute cash crunch in December 2014 and Maran sold the airline to Singh in January 2015.