Govt okays IndiGo FDI plan subject to HC nod
2 Aug 2014 11:48 PM GMT
‘IndiGo's proposal has been cleared subject to approval of High Court,’ an official said after a meeting of the Foreign Investment Promotion Board (FIPB) headed by Finance Secretary Arvind Mayaram. InterGlobe Aviation is the holding company of IndiGo.
As per the proposal, equity holding of IndiGo's promoter Rakesh Gangwal through Caelum Investments will be classified as NRI investment and free the FDI limit for fresh investment. Gangwal through Caelum Investments (incorporated in Delaware, US) holds a 47.88 per cent stake in InterGlobe Aviation. Rahul Bhatia owns the remaining stake in InterGlobe Aviation.
According to FDI rules, foreign companies and foreign airlines are allowed to hold up to a 49 per cent stake in an Indian airline. NRIs are permitted to hold up to 100 per cent in an Indian carrier.
Currently, Gangwal's stake is classified as FDI even though a group of NRIs hold the majority stake in Caelum Investments. As per sources, the proposal is that Caelum will be merged into InterGlobe Aviation. The 147,000 equity shares held by Caelum in InterGlobe Aviation will be cancelled.
In a cashless transaction, InterGlobe Aviation will issue 147,000 equity shares having face value of Rs 1,000 to NRI owners of Caelum in in proportion to the voting units held by them.
Meanwhile, low-cost carrier SpiceJet said on Friday that it would resume its Delhi-Kabul flights from Saturday as per its old schedule. As a precautionary measure, the Chennai-based airline had suspended services to Kabul on July 18 after some security-related incidents.
SpiceJet had been flying thrice a week to the capital of war-ravaged Afghanistan on Tuesdays, Thursdays, and Saturdays. The national carrier Air India had also suspended its operations to Kabul last month.
Following increased security threats, especially after a Malaysian Airlines flight MH17 was shot down killing all the 298 passengers on board in the middle of last month, and increased militant activity in Afghanistan, many international airlines had also suspended the air operations to the war ravaged country last month.
As per the proposal, equity holding of IndiGo's promoter Rakesh Gangwal through Caelum Investments will be classified as NRI investment and free the FDI limit for fresh investment. Gangwal through Caelum Investments (incorporated in Delaware, US) holds a 47.88 per cent stake in InterGlobe Aviation. Rahul Bhatia owns the remaining stake in InterGlobe Aviation.
According to FDI rules, foreign companies and foreign airlines are allowed to hold up to a 49 per cent stake in an Indian airline. NRIs are permitted to hold up to 100 per cent in an Indian carrier.
Currently, Gangwal's stake is classified as FDI even though a group of NRIs hold the majority stake in Caelum Investments. As per sources, the proposal is that Caelum will be merged into InterGlobe Aviation. The 147,000 equity shares held by Caelum in InterGlobe Aviation will be cancelled.
In a cashless transaction, InterGlobe Aviation will issue 147,000 equity shares having face value of Rs 1,000 to NRI owners of Caelum in in proportion to the voting units held by them.
Meanwhile, low-cost carrier SpiceJet said on Friday that it would resume its Delhi-Kabul flights from Saturday as per its old schedule. As a precautionary measure, the Chennai-based airline had suspended services to Kabul on July 18 after some security-related incidents.
SpiceJet had been flying thrice a week to the capital of war-ravaged Afghanistan on Tuesdays, Thursdays, and Saturdays. The national carrier Air India had also suspended its operations to Kabul last month.
Following increased security threats, especially after a Malaysian Airlines flight MH17 was shot down killing all the 298 passengers on board in the middle of last month, and increased militant activity in Afghanistan, many international airlines had also suspended the air operations to the war ravaged country last month.
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