Fighting a major crisis at its group entity NSEL, exchange operator and technology provider Financial Technologies India Ltd (FTIL) today announced sale of its Singapore-based bourse SMX for $150 million (Rs 931 crore) to US-based InterContinentalExchange (ICE).
The sale of Singapore based exchange SMX by the Jignesh Shah-led Financial Technologies announced this morning will provide some cash to meet the mounting pay out arrears at his other group firm NSEL. The dues from NSEL are about Rs 5,500 crore while SMX sale provides Shah only about Rs 930 crore. Hardly Rs 200 crore has been paid out so far from other sources.
Jignesh Shah-led Financial Technologies Group had launched Singapore Mercantile Exchange (SMX) with much fanfare over three years ago in August 2010 as a pan-Asia trading platform for various commodities including metals, energy, currency and agriculture commodities.
Financial Technologies would use sale proceeds to retire debts.
Financial Technologies, the main holding firm for Jignesh Shah-led group that has also set up Indian exchanges like commodity bourse Multi Commodity Exchange of India Ltd (MCX), stock exchange MCX-SX and now crisis-hit NSEL (National Spot Exchange), held its stake in SMX through a wholly owned subsidiary Financial Technologies Singapore Pte Ltd (FTSPL).
Reacting to the announcement, shares of Financial Technologies soared by 11 per cent to Rs 201.40 on the BSE in early trade. However, later the stock pared some of the gains and was trading at Rs 201.40, up 3.97 per cent during afternoon trade.
In a regulatory filing to Indian stock exchanges where Financial Technologies is listed, the company said FTSPL has reached an agreement to sell 100 per cent of its equity ownership in SMX (together with its wholly owned subsidiary SMX CC) to ICE Singapore Holdings, an entity owned by US-based ICE group.
The transaction was approved by the Board of Directors of FTSPL and Financial Technologies yesterday with signing of definitive agreements and is subject to certain customary closing conditions and approvals, the company said.
Financial Technologies will primarily utilise the proceeds towards repayment of outstanding debt towards External Commercial Borrowings (ECB) and Foreign Currency Loan (FCL) to banks subject to regulatory approvals, if any, pursuant to which Financial Technologies will become debt/lien-free, it said.
The group has been going through a major crisis for past few months ever since a Rs 5,600-crore payment default came to light at NSEL, although various entities including SMX have been