Monday, June 28, 2021

Sebi keeps in 'abeyance' processing of Go Airlines draft IPO papers

New Delhi: Markets regulator Sebi has kept in abeyance the processing of Go Airlines' draft papers for an initial public offer worth Rs 3,600 crore.

Go Airlines (India) Ltd, which has announced rebranding itself as 'Go First', filed preliminary papers for an initial share sale worth Rs 3,600 crore in May. The proceeds will be mainly used to repay dues.

The "issuance of observations (has been) kept in abeyance", according to Sebi's latest update on processing status of Go Airlines' draft offer documents. The information was updated on June 25.

In Sebi parlance, issuance of observations implies its go-ahead for the IPO.

Normally, Sebi gives its observations on IPO papers in 30 days.

In cases where Sebi feels there is a possible cause for investigation or investigation is already in progress but no show cause notice has been issued, Sebi can keep the matter in abeyance for 30 days, which can be extended by further 30 days or till conclusion of the investigation.

In cases where a show cause notice has been issued, Sebi can keep the process in abeyance for 90 days and by further 45 days or till conclusion of the proceedings.

Keeping the processing of Go Airlines' IPO papers in abeyance indicates that the company or the selling shareholders may be subject to some investigation.

On June 11, the regulator had sought clarifications from the offer's Lead Manager. The Coordinating Lead Manager (Pre-Issue) is ICICI Securities Ltd.

Specific details about the reasons for Sebi keeping the issuance of observations in abeyance could not be immediately ascertained.

An airline spokesperson said, "Go Air has received no communication from Sebi."

The airline, which has been flying for more than 15 years ago, plans to raise Rs 3,600 crore through issuance of fresh equity shares. It also plans to raise up to Rs 1,500 crore by way of an pre-IPO placement.

From the net IPO proceeds, 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.

28/06/21 PTI/Economic Times

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