IndiGo secures credit facility worth Rs 2,577 crore since April, 3 times more than last year

Amid a bitter spat between IndiGo promoters Rakesh Gangwal and Rahul Bhatia, Interglobe Aviation Ltd secured credit facility worth Rs 2,577.75 crore since April. This includes a credit facility of Rs 867.43 crore from Deutsche Bank AG in June after the airline pledged its investment in three mutual fund schemes managed by Birla Sun Life Mutual Fund, ICICI Prudential Asset Management and SBI Mutual Fund, reported Mint. In May, the airline secured Rs 660.32 crore worth of secured facilities from Credit Agricole Corporate and Investment Bank, the daily added. For this, the airline pledged an exclusive charge over its fixed deposits (FDs).

On April 4, the airline secured a credit facility worth Rs 1,050 crore from Standard Charted Bank, which was approved on IndiGo's MF investments and lien over its FDs worth Rs 185 crore, which also included interests, renewals or rollovers on these schemes.

Notably, the total credit facility availed by IndiGo is three times the facility availed during the corresponding quarter last year. During this period in 2018, the airline had secured the credit facility worth Rs 778 crore from Kotak Mahindra Bank and HSBC on MF investments and lien on its FDs.

The recent credit facilities secured by the airline comes in light of a mega-deal signed between IndiGO and CFM International. IndiGo on June 17 had placed an order worth $20 billion for aircraft engines from CFM International for its 280 Airbus A320neo and A321neo planes. CFM is a 50:50 joint venture (JV) between the US' General Electric and French engine maker Safran. The deal between the IndiGo and CFM was a big jolt to the P&W powered turbofan engine programme.

India's largest airline, which had a fleet of 217 aircraft as on March 31, 2019, was embroiled in a controversy after one of the IndiGo promoters, Rakesh Gangwal, recently accused his partner and co-founder Rahul Bhatia of corporate governance lapses. Comparing IndiGo with a betel shop, Gangwal said even a "paan ki dukaan" would have managed matters with more grace. Gangwal also alleged the shareholders' agreement provided Bhatia unusual controlling rights over IndiGo. Bhatia and his affiliates (InterGlobe Enterprises Group) refuted Gangwal's allegations, saying the airline was running well and was managed by a competent set of managers.

Gangwal, along with his affiliates, holds around 37 per cent stake in InterGlobe Aviation. Co-founder Rahul Bhatia and his affiliates (IGE Group) has around 38 per cent stake. InterGlobe Aviation (or IndiGo) is also the parent of the country's largest airline IndiGo.

ALSO READ: Feud between IndiGo promoters: Gangwal says even 'paan ki dukaan' would have handled matters with more grace

Also Read: Friends turned foes: How IndiGo founders Rahul Bhatia and Rakesh Gangwal's relationship soured

Edited by Manoj Sharma