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To make addl invst in fin services in India: WL Ross
Published on Tue, Jul 15, 2008 at 16:10 , Updated at Wed, Jul 16, 2008 at 13:04
Source : CNBC-TV18
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Wilbur Ross, Chairman and CEO of WL Ross & Co said the exact nature of the transaction will be revealed in the next 10 days. They are not contemplating an open offer for SpiceJet, he confirmed. WL Ross will make an additional investment in India after the market correction. The company will focus on financial services to invest in India. Excerpt from CNBC-TV18's exclusive interview with Wilbur Ross: A: The exact details will be released when we finalise the whole transaction. We made an economic agreement with the board of SpiceJet and with the promoters. We are now trying to confirm that both the form of the investment and the quantity of it are what is needed to bring SpiceJet through this critical period of very high oil prices. We hope to be able to reveal the exact final transaction within a week or 10 days or so. But that is what we are trying to accomplish. Q: Can you clarify the broad nature of participation for the shareholders of SpiceJet? If it is an equity participation at Rs 345 crore, it could be over 15% and trigger the takeover code or trigger an open offer. Will the open offer be triggered at all? A: No, it is not contemplated to structure the transaction in a fashion that would mandate an open offer. Q: Can you confirm whether it will be through the FCCB route at all? A: The exact details will be brought out once we have confirmed that both the form and the substance of it are exactly what is needed for the company. Q: Will this be the only investment you will be making in SpiceJet? Are you contemplating more investments in this company in the next 12 months or so? A: Our objective is to have this investment carried through the crisis period. In the event that the crisis lasts longer or is more severe than anticipated, in principle, we would be prepared to supplement the investment. The amount of this investment is not a large one for us. We have lots of reserve capital should that become necessary.
Q: Is SpiceJet the only company you are looking at in the Indian airline space? Are any other companies of interest to you at all? A: We tend to focus on one particular company and a particular industry in an individual country. So, in the longer-term, consolidation of the industry makes sense. For the moment, SpiceJet is our entire focus. Q: Will there be any other industry or assets that you will be looking at after your SpiceJet investment is over? A: Yes, we are continuing to look at other situations in India. We had been a little frustrated by the frothy market that had prevailed there until recently. It seemed that many securities were being valued well in excess of their intrinsic value. Now that there is more rationality in the market, we look forward to making additional investments in the range of other industries. Q: What kind of industries would you be interested in? Are you looking specifically at the non-bank finance companies or real estate companies? A: In the western world, we have been investing in a broad range of basic industries. We are not hi-tech people. We are comfortable with most basic businesses and with most versions of financial services. So, those would be the sectors in which we would focus. Q: Coming back to the investment that you are just about to make in SpiceJet, it is confirmed that it is USD 80 million as of now? A: Yes, that is a correct figure. Q: What kind of upper limits are you looking at in case the need should arise? A: We have quite a few billions of dollars under our partnerships. We don’t really have a particular cap for SpiceJet right now. The real thing is to try to make an investment that is proportionate to the needs of the company. Q: In the due diligence that you may have done of the company, do you think USD 80 million should see the company through? A: We are trying to confirm that now. That is the process we in the company are going through. Our preliminary view is that it does and we are now trying to confirm that. |
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