Sale proceeds will be used to repay outstanding ECB debt and foreign currency loans
Financial Technologies India Ltd (FTIL), on Tuesday, announced the sale of its Singapore-based bourse SMX for $150 million (Rs.931 crore) to Atlanta-headquartered IntercontinentalExchange (ICE).
Jignesh Shah-led FTIL operates commodity bourse MCX, stock exchange MCX-SX and the crisis-hit National Spot Exchange in India.
FTIL holds its stake in the Singapore multi-product exchange through a wholly-owned subsidiary Financial Technologies Singapore Pte Ltd.
In a regulatory filing to stock exchanges in India, FTIL said its Singapore subsidiary had signed an agreement to sell 100 per cent of its equity in Singapore Mercantile Exchange (SMX) to ICE Singapore Holdings, an entity owned by U.S.-based ICE group, for $150 million.
The regulatory filing said the company would use the sale proceeds towards repayment of outstanding debt in external commercial borrowings and foreign currency loans, subject to regulatory approvals, if any. Pursuant to this, FTIL would become debt/lien-free, it added.
FTIL has a debt of Rs.1,223.75 crore in external commercial borrowings and foreign currency loans, according to its annual report 2012-13.
National Spot Exchange Ltd (NSEL) is engulfed in a Rs.5,600-crore payment crisis after the bourse stopped operations on government directive following violation of certain norms.
After the NSEL crisis came to the fore, FTIL and its group firms such as MCX-SX came under the scanner of the Securities and Exchange Board of India (SEBI). Top NSEL officials were also arrested and different investigative agencies are probing the NSEL crisis.
Arun Dalmia, President of NSEL Investors Forum, a body of aggrieved investors, questioned the FTIL’s sudden move to sell SMX to clear foreign currency loans which, he said, were due in 2014 and 2015.
“FTIL is equally responsible in the NSEL payment crisis, and it should repay dues of NSEL investors first. There should be a serious enquiry into the issue,” Mr. Dalmia told PTI.
Raising an emotional pitch on the sale of SMX, FTIL CEO and Managing Director Jignesh Shah said: “He has mixed emotions about parting ways with an asset that he had nurtured as a global showcase of an institution, built with Singapore’s world-class infrastructure and regulation coupled with Indian technology and expertise.”
SMX was launched with much fanfare in 2010 as a pan-Asia trading platform for various commodities.
Shares of FTIL soared by 11 per cent to Rs.201.40 on the BSE in early trade. It settled at Rs. 185.05 however.