SpiceJet, Maran agree to resolve warrants' issue

The dispute over transfer of preferential shares remains and the high court will hear it on April 7

Two days after erstwhile owner Kalanithi Maran dragged SpiceJet to court over non-issue of warrants, both the parties have decided to resolve the issue.

Counsels of SpiceJet and KAL Airways have agreed before the Delhi High Court jointly approached the regulators on Tuesday, seeking permission to issue warrants.

SpiceJet board is likely to pass a resolution within three days after the court order, requesting the regulators -- Bombay Stock Exchange and Securities and Exchange Board of India to give the approval for issue of warrants within two weeks.

However, the dispute over transfer of preferential shares remains and the high court will hear it on April 7.

While SpiceJet share price, which is hovering around Rs 60, is significantly higher than what it was when the terms of the deal were finalised, the warrants will be issued at Rs 16.30 per share -- the price agreed in the share purchase agreement.

On Monday, SpiceJet said the warrants could not be issued earlier because it didn’t have requisite approval from the regulators. “. . . the parties have agreed to jointly approach BSE/Sebi.

"Necessary board resolution will be passed authorising the joint representatives to represent the applications before BSE and Sebi.

"SpiceJet has already been pursuing this matter before the BSE and Securities and Exchange Board jointly with the representative of Kalanithi Maran and KAL Airways and the matter is pending consideration with Sebi,” the company stated.

The warrants would give Maran a 24 per cent stake in the company.

Under the 2015 sale purchase agreement, Maran and KAL transferred their entire 350,428,758 equity shares (58.46 per cent stake) in the airline, to Ajay Singh.

According to the deal, they were to receive the redeemable warrants in return for around Rs 679 crore (Rs 6.79 billion) that they were to give to the airline towards operating costs and debt payment, the petition has claimed.

Maran and his airline, KAL, have alleged in their plea that despite giving around Rs 579 crore (Rs 5.79 billion) to Spicejet, the carrier failed to issue them the warrants or allot them tranche one and two of Convertible Redeemable Preference Shares and the amount was not utilised for paying statutory dues due to which they were also facing prosecution.