About 22 per cent stake held by the promoters in Go Airlines has been pledged with three banks.

According to the DRHP filed by the company ahead of its proposed IPO, 4,50,00,000 equity shares amounting to 22.56 per cent of the pre-Issue paid up capital held by Go Investments have been pledged in favour of the consortium consisting of Bank of Baroda and BNP Paribas and led by Central Bank of India pursuant to the working capital facility of ₹2,405 crore availed by the company.

“In this regard, there may be a requirement to create additional pledge of share held by Go Investments in our company. Any default under the agreements pursuant to which these equity shares would be pledged will entitle the pledgee to enforce the pledge over these equity shares. If this happens, the aggregate shareholding of our promoters and promoter Group may be diluted and we may face certain impediments in making decisions on certain key, strategic matters involving the company. As a result, we may not be able to conduct our business or implement our strategies as currently planned, which may adversely affect our business and financial condition,” Go Airlines said in its DRHP filing.

“Further, any rapid sale of equity shares on the floor of the Stock Exchanges by such third parties may adversely affect the price of the shares,” it added.

Go Airlines Ltd has filed a DRHP to raise ₹3,600 crore through an initial public offering. The airline plans to use ₹2,015 crore for prepayment or scheduled repayment of all or a portion of certain outstanding borrowings, ₹279 crore for replacement of letter of credits, which are issued to certain aircraft lessors towards securing lease rental payments and future maintenance of aircrafts, with cash deposit, and ₹254 crore for repayment of dues to Indian Oil Corporation Ltd, in part or full, for fuel supplied.

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