WL Ross sells stake in SpiceJet for $127m

The turnaround specialist has departed one of India's most difficult sectors with a $47m profit.

WL Ross, the turnaround-focused private equity firm of US financier Wilbur Ross, has divested its 30 percent interest in Mumbai-listed budget carrier SpiceJet for $127.7 million, according to a notice placed by the company in Indian daily Business Standard

WL Ross made the exit alongside fellow investor Royal Holdings Services, an investment vehicle owned by India’s Kansangra family. In total, the pair sold 37.7 percent of SpiceJet to Kalanithi Maran, head of India's Sun TV Network who made the investment via his privately owned airline company Kal Airways, according to a statement posted on the Bombay Stock Exchange. 

Maran, who runs 20 television channels and two general newspapers in south India, bought 30.23 percent of SpiceJet from WL Ross, which formerly held stakes in the company through foreign currency convertible bonds, and 7.49 percent from the Kansagra family. The total value of the transaction was $159 million.

Delhi-based SpiceJet was able to weather skyrocketing fuel prices and heavy government taxes to report a 29 percent growth in revenue for the year ended March 2010, according to the Financial Times.

Spicejet

WL Ross paid INR 3.45 billion (then $80 million; €50 million) in July 2008 to buy a 30 percent stake in SpiceJet, which at the time was also reportedly being courted by other Indian airlines such as Kingfisher, Jet and Paramount. Additionally, it was reported that the airline had drawn the interest of Anil Ambani, the younger Ambani brother and chairman of Reliance-Anil Dhirubhai Ambani Group (R-ADAG).

The firm is based in New York and has an office in Mumbai which opened in 2006. It operates as a subsidiary of Invesco. WL Ross has an agreement with India’s Housing Development Finance Corporation, which assists it in sourcing and evaluating private equity opportunities in the country.