Trending Mid Cap Stocks: Legal dispute between SpiceJet promoters continues affecting stock price
DSIJ Intelligence / 14 Jul 2017
The on-going dispute between former and current promoters of SpiceJet, has affected the share price of the company. Fall of 17.8 percent in the share price was witnessed since past two weeks.
The on-going dispute between former and current promoters of SpiceJet, has affected the share price of the company. Fall of 17.8 percent in the share price was witnessed since past two weeks.
Current Chairman of SpiceJet, Ajay Singh, had bought stake of 60.1 percent in the company in early 2015, for Rs 2. As per the share purchase agreement (SPA) executed with erstwhile promoters Kalanithi Maran and KAL Airways Pvt Ltd., the airline company was supposed to allot warrants/shares equivalent to 23 percent of the expanded capital. On failure of the allotment, the company would be liable to pay compensation of Rs 2,200-2,500 crore as damages to the promoters.
The former promoters had transferred their stake and had infused Rs 450 crore into the company, to settle statutory liabilities and safeguard the interest of the shareholders. But the airline has refused to allocate warrants and hence the matter is to be resolved by High Court proceedings.
Also, BSE and SEBI has refused the permission for allotting warrants to the promoters. The Arbitral Tribunal has been involved to resolve the said issues.
Clarification on the issue is expected from both the parties once the arbitration process is over.
The stock was trading at Rs 132.15 as of 30th June 2017 and currently is trading at Rs 112.90 level.
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