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Go Airlines files DRHP for IPO to raise up to Rs 3,600 crore

15 May 2021 Evaluate

Go Airlines, which has rebranded itself as ‘Go First’, has filed a draft red herring prospectus (DRHP) for an initial public offer (IPO) to raise up to Rs 3,600 crore through issuance of fresh equity shares. The proceeds will be mainly used to repay dues amid the aviation industry facing strong headwinds due to the coronavirus pandemic. It also has plans to raise up to Rs 1,500 crore by way of a pre-IPO placement.

The DRHP said from the net proceeds of the IPO, 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’. Also, the airline will make repayment of dues of Rs 254.93 crore to Indian Oil Corporation for fuel supplied to it.

As per the DRHP, there are a total of 99 litigations against the company, including 43 related to actions by statutory or regulatory authorities. Global coordinators and book running lead managers to the issue are ICICI Securities, Citi and Morgan Stanley. The airline is now focusing on ultra-low cost carrier (ULCC) model.

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