IndiGo parent to seek shareholders' approval for more borrowings
New Delhi: IndiGo's parent InterGlobe Aviation will seek shareholders' approval for borrowing additional Rs 10,000 crore as it will be taking deliveries of a significant number of aircraft, according to a filing.
The company, which operates the country's largest airline by market share, would also be seeking nod for "creation of charges against borrowings". This would be to secure borrowings worth up to Rs 30,000 crore.
These are among the proposals that would be put up for approval at the annual shareholders' meeting scheduled to be held on August 10 in the national capital.
As per the notice for the annual meeting, the company would seek nod for "authorising the board to borrow, from time to time, an additional sum or sums of money, not exceeding Rs 10,000 crore".
The amount would be only be utilised towards the requirements of issuing SBLCs (Standby Letters of Credit) in favour of the lessors in the ordinary course of business, it added.
"The company securitises its supplementary rental obligations due towards the lessors for aircraft on operating leases and issues SBLCs in favour of the lessors. The company will be taking deliveries of a significant number of additional aircraft on a operating lease basis for which new SBLCs will be required to be issued to the lessors," the notice said.
Further, InterGlobe Aviation said it has initiated cost saving initiatives on the charges payable to the banks for availing such facilities.
"In order to cater for the growth and introduction of new banks for cost reduction, the company will be seeking fresh sanctions from banks/ financial institutions for issuing SBLCs to lessors," it added.
In September 2016, shareholders had approved borrowing limit of Rs 20,000 crore.
Besides, clearance would be sought for creation of pledges, mortgages, hypothecations and charges on moveable and immovable properties in favour of banks, financial institutions and non-banking finance companies, among others to "secure the borrowings to the extent of Rs 30,000 crore", the notice said.
IndiGo -- which is pursuing ambitious expansion plans -- currently has a fleet of more than 160 aircraft, including ATR planes.