Interglobe Aviation, which owns India’s largest airline, IndiGo has secured a line of credit since April worth Rs 2,577.75 crore This credit facility would help the airline in covering its working capital needs while also helping it to focus on expansion. Back in June, the IndiGo had signed a $20 billion agreement with CFM International, the popular aircraft engine manufacturer and as part of this agreement, IndiGo has agreed to buy CFM International LEAP-1A engines which will power Airbus A320neos and A321neo aircrafts in IndiGo’s fleet. As part of this deal, IndiGo will also get spare engines and an engine overhaul support agreement.
IndiGo’s Credit Facility from HSBC, Standard Chartered and Others
As reported by Mint, a corporate affairs filing revealed that IndiGo secured an amount of Rs 660.32 crore on May 6, from Credit Agricole CIB and IndiGo did this by creating an exclusive charge over a part of IndiGo’s fixed deposits. What’s interesting to note is that in the April – June period, IndiGo secured total credits worth Rs 2,577 crore and this amount was three times the amount which IndiGo had secured same time last year. Last year, IndiGo had secured a total credit of Rs 778.06 crore which included Rs 78.06 crore from Kotak Mahindra Bank and Rs 700 crore from HSBC via a pledge of mutual fund investments and also through fixed deposits owned by IndiGo.
On June 3, IndiGo secured another credit facility worth Rs 867.43 crore from Deutsche Bank AG by pledging investments in three mutual fund schemes managed by Aditya Birla Sun Life Mutual Fund, ICICI Prudential Asset Management and SBI Mutual Fund. Before this, the airline had a credit facility of Rs 458.35 crore from Deutsche Bank through a pledge of IndiGo’s mutual fund investments.
Credit Facility Crucial in Times of Distress for IndiGo
Further, by the means of enabling a first and exclusive charge over IndiGo’s mutual fund investments and through a lien over IndiGo’s fixed deposits worth Rs 185 crore, IndiGo secured another credit facility from Standard Chartered worth Rs 1,050 crores. It is worth noting that IndiGo is currently under scrutiny from the Securities and Exchange Board of India after a stifle between the promoters of the company. The cause of the struggle has been said to be Gangwal-led RG Group allegations which say that powers to manage business and appoint directors are more in favour of the IGE group.