The initial public offering (IPO) of budget airline GoAir, which was placed on hold by the Securities and Exchange Board of India (SEBI) in June, has finally been approved by the market regulator for a share sale for Rs 3,600 crore. According to Sebi’s latest report on the processing progress of the draught offer documents, the carrier got its observations on August 26 after filing preliminary papers for the IPO in May.
The issue of observations denotes the Sebi’s approval of the IPO. SEBI placed the IPO clearance procedure of no-frills airline Go Airline (India) Ltd on hold in June. The notice on the regulator’s website did not justify the temporary suspension of these approvals; however, it did say that it had sent some remarks to merchant bankers over these two concerns but did not explain what those observations were.
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According to the DRHP, the airline proposes to use about 2,015.81 crores of the net IPO proceeds to pre-pay or arrange repayment of all or a portion of certain existing borrowings. Citi, and Morgan Stanley are the issue’s global coordinators and Book Running Lead Managers.
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A sum of Rs. 279 crores will be used to “replace letter of credits, which are provided to select aircraft lessors in order to secure lease rental payments and future aircraft maintenance, with cash deposits.”
