Sebi keeps in 'abeyance' processing of Go Airlines' IPO draft papers

Go Airlines (India) Ltd, which has announced rebranding itself as 'Go First', filed preliminary papers for an initial share sale worth Rs 3,600 crore in May. The proceeds will be mainly used to repay dues.

The ''issuance of observations kept in abeyance'', according to Sebi's latest update on processing status of Go Airlines' draft offer documents. The information was updated on June 25.

In Sebi parlance, issuance of observations implies its go-ahead for the IPO. Under existing norms, the regulator is ''obligated to keep issuance of observations in abeyance for a period of 30 days or 45 days or 90 days or more, as the case may be''.

On June 11, the regulator had sought clarifications from the offer's Lead Manager. The Coordinating Lead Manager (Pre-Issue) is ICICI Securities Ltd.

Specific details about the reasons for Sebi keeping the issuance of observations in abeyance could not be immediately ascertained.

There was no immediate comments from a Go Airlines spokesperson.

The airline, which has been flying for more than 15 years ago, plans to raise Rs 3,600 crore through issuance of fresh equity shares. It also plans to raise up to Rs 1,500 crore by way of an pre-IPO placement.

From the net IPO proceeds, the airline plans to pay over Rs 2,015.81 crore towards prepayment or scheduled repayment of all or a portion of certain outstanding borrowings.

An amount of Rs 279.26 crore would be for ''replacement of letter of credits, which are issued to certain aircraft lessors towards securing lease rental payments and future maintenance of aircraft, with cash deposit'', as per the Draft Red Herring Prospectus (DRHP) filed with Sebi in May.

Also, the airline to make repayment of dues of Rs 254.93 crore to Indian Oil Corporation for fuel supplied to it.

The Wadia group owns 73.33 per cent stake in the carrier while the remaining shareholding is with other entities, including Baymanco Investments Ltd. The latter holds 21.05 per cent stake.

Others are Sea Wind Investment and Trading Company Ltd (3.76 per cent shareholding), Heera Holdings & Leasing Pvt Ltd, Nidhivan Investments & Trading Company Pvt Ltd and Sahara Investments Pvt Ltd -- all the four entities have 0.62 per cent stake each in the airline.

Global coordinators and Book Running Lead Managers to the issue are ICICI Securities, Citi and Morgan Stanley.

At present, three scheduled carriers are listed on the domestic bourses. They are IndiGo, SpiceJet and Jet Airways.

Jet Airways, which shuttered operations in April 2019, is undergoing insolvency resolution process. Last week, the National Company Law Tribunal (NCLT) approved Jalan Kalrock Consortium's bid for Jet Airways.