Companies

IndiGo AGM passes resolution raising its borrowing powers to Rs 40,000 cr

Our Bureau New Delhi | Updated on September 04, 2020 Published on September 04, 2020

Approves appointment of Pallavi Shroff and Dr. Venkataramani Sumantran as Independent Directors

At its 17th AGM on Friday, IndiGo passed a special resolution increasing the borrowing powers of the company for an aggregate amount not exceeding Rs 40,000 crore.

The airline informed the BSE about this development late on Friday evening.

The airline also informed the BSE that the AGM approved the appointment of Pallavi Shroff and Dr. Venkataramani Sumantran as Independent Directors for a term of five consecutive years

Earlier, addressing the virtual AGM, Ronojoy Dutta, Whole Time Director and Chief Executive Officer,  said that raising revenue through increased sales revenue is the “preferred path” for the airline, adding that at this point a Qualified Institutional Placement (QIP) has a 50-50 chance of  being implemented.

“We are waiting to see how the sales revenue side develops and at this point if you ask me the QIP has a 50-50 chance of actually being implemented. We are focussed on increasing liquidity through sales revenue while having these financial initiatives on the side as bullets, which we could use but not have to use,” he said at the airline’s 17th AGM.

Unlike the 16th AGM, which was held here last year, this year’s virtual meeting was attended by both Rakesh Gangwal and Rahul Bhatia, the two main promoters of the airline. Last year, Gangwal, who has an ongoing dispute with Bhatia, skipped the AGM.

Dutta said at this year’s AGM that the airline started with ₹9,000 crore and was raising another ₹6,000 crore and has the QIP on the table as well.

The CEO added that the daily cash burn when operations resumed on May 25 was ₹40 crore but by the end of the quarter it had been reduced to ₹30 crore a day. “It continues to get better,” he said.

Fleet utilisation

Dutta said that at the moment, the airline is utilising only 30-35 per cent of its fleet largely, due to restrictions in Mumbai, Chennai and Kolkata.

“We are aggressively adding capacity and hope to take that utilisation number up as fast as we can,” he said, pointing out that the government has now allowed domestic airlines to operate 60 per cent of the flights that they operated before the pandemic broke out.

IndiGo has no plans to accelerate the delivery of the Extra Long Range (XLR) aircraft and as planned they will be here in the first quarter of 2024. The airline also does not have any right now of going for widebody aircraft, Datta said. A wide body aircraft will allow the airline to operate non-stop flights to the US, Canada, parts of Africa and Australia, among others.

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Published on September 04, 2020
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