Friday, December 31, 2021

IndiGo promoters resolve 3-year dispute to prepare for fight ahead

It was curtains down on the nearly three-year-old spat between co-founders of India’s largest airline after shareholders overwhelmingly voted for amending articles of association (AoA) at a 48-minute meeting held on Thursday.

The extraordinary general meeting (EGM) was called for the removal of certain contentious regulations related to transferring, acquisition and other provisions on equity shares. More than 99.9 per cent of shareholders comprising promoters, institutional investors and the public voted in favour of the resolution. A few negatives were also polled from public shareholders, company filings with BSE showed.

Convened by InterGlobe Aviation, the parent company of IndiGo, the amendments allow promoters to sell or transfer shares to a third party without giving each other notice. Together with their related entities and individuals, Rahul Bhatia and Rakesh Gangwal control a staggering 77.4 per cent stake in InterGlobe Aviation.

Investors gave a thumbs up to the move as InterGlobe Aviation shares opened at Rs 1993 on Friday, up +0.74 per cent from the previous day’s close of 1978.45 on BSE.

Earlier, the two warring factions -- that of InterGlobe Enterprises (IGE) Pvt. Ltd and Rahul Bhatia – known as the IGE Group – and Rakesh Gangwal, The Chinkerpoo Family Trust and Shobha Gangwal – comprising the RG Group – had collectively requisitioned the shareholders’ meeting on November 25.

The move was largely prompted by Air India’s acquisition by Tata Sons, the planned launch of stock market bull Rakesh Jhunjhunwala backed Akasa Air and a high valuation that the IndiGo stock currently enjoys in the market, industry experts said.

According to sources, a serious divergence of opinion between Bhatia and Gangwal had first emerged over the choice of the right engine for the airline’s Airbus fleet before getting extended to other areas of the company’s day-to-day functioning. This, however, could not be independently verified.

The current dispute emanated from a shareholders agreement signed at the time of InterGlobe’s October 2015 listing between the promoters. Even as the agreement expired in 2019, the clauses remained in the AoA. Gangwal held that this gave unusual rights to Bhatia including the right of first refusal (RoFR), in the event the former wished to transfer or divest his shareholding.

31/12/21 Manish Pant/

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