Go Airlines India Ltd has filed a draft red herring prospectus with Securities Exchange Board of India to raise Rs 3,600 crore via initial public offering. The company said it is in consultation with its lead managers to issue shares through a preferential issue or any other method to raise up to Rs 1,500 crore.

ICICI Securities, Citigroup Global markets India, Morgan Stanley are the lead managers to the issue.

The proceeds from the issue will be used to repay all or a portion of certain outstanding borrowings up to Rs 2,015.81 crore. Rs 279.26 crore will be used for replacement of letters of credit which are used to certain aircraft lessors towards securing lease rental payments and future maintenance of aircrafts with cash deposit.

As of December 2020, its total borrowings including current maturities and vehicle loans was Rs 2,036.21 crore and cash and cash equivalents were at Rs 11.64 crore

“The reduction of our overall debt will reduce interest costs and improve our lease rate factors. We expect our financial position to be improved by this reduction in debt coupled with our cost management and reduction measure and the anticipated growth in our business. We will continue to focus on strengthening and improving our overall capital structure to allow us to invest in the growth of our business by adding more aircraft as well as expanding our network”, the company said in its DRHP.

The company will use Rs 254.93 crore for repayment of dues to Indian Oil Corporation in part or full for fuel supplied to the company.

For fiscal year 2020, total income for the company stood at Rs 7,258.01 crore versus Rs 5,936.75 crore a year ago. Net loss for the period widened at Rs 1,270.74 crore against Rs 386.60 crore a year ago.

For nine month ended December 2020, the company carried 23.87 million total passengers which includes 1.7 million international and 22.17 domestic.

As of 10 February 2021, its fleet inventory consisted of 56 aircraft, of which 46 aircraft were A320 NEO models and 10 were A320 CEO models. Of these 10 A320 CEOs, three were in the process of redelivery, which will further enhance the homogenous nature of our fleet.