Set to hit the capital markets with Rs 3,268 crore IPO next week, InterGlobe Aviation on Monday said it will retire nearly one-third of its total debt of Rs 3,912 crore from the share sale proceeds.
InterGlobe Aviation is the holding company of IndiGo airline. The company said it will retire Rs 1,166 crore out of its Rs 3,912 crore debt from the IPO proceeds.
Stating that the airline has not a single penny in working capital or non-aircraft purchase related debt, company President Aditya Ghosh said the entire Rs 3,912-crore debt it has is related to aircraft purchases. Out of its nine years of existence, it has been profitable in seven years, he claimed.
“For us the company turning a negative net worth of Rs 139 crore is a non-event,” Ghosh said.
It happened on June 30, when the company declared an interim dividend of Rs 1,500 crore to the promoters. Since then the net worth has turned positive and it remains so. As of now “we have a cash balance of over Rs 3,500 crore on our books”, he said.
“We had to report that we had negative net worth for disclosure purposes as we happened to file our IPO papers with the Sebi on June 30. But let me repeat, that is a non-event as far as IndiGo and InterGlobe are concerned,” Ghosh said while formally announcing the IPO.
When asked about hefty payouts the promoters have been getting all these while, he said, “As a manager my mandate is to keep my customers happy, my employees happy and also investors/shareholders. I have been doing as a private company and will continue to do so as public company going forward.”
Ghosh said the company will launch its Rs 3,268-crore public issue, the first from the airline sector after the Spicejet IPO, on October 27 which will remain open till October 29. The Rs 10-share has been priced at Rs 700-765.
The public issue includes a share premium consisting of a fresh issue aggregating up to Rs 1,272.2 crore and offer for sale of up to 26,112,000 shares, comprising 3,290,419 shares by InterGlobe Enterprises; 3,006,000 shares by Rahul Bhatia who will retain just 40,000-share post-issue thus practically exiting the airline’s direct holding.
When asked about the public perception about Bhatia, who has been the face of the airline from day one, Ghosh said that even after the issue both the key promoters (Bhatia and Rakesh Gangwal) will hold over 47 percent each in the holding company, which in turn own the airline.”