RG Group, an investment vehicle for co-founder Rakesh Gangwal and his family, has called an Extraordinary General Meeting (EGM) for shareholders of IndiGo Airlines (6E, Delhi International), in which it is seeking to change rules governing share transactions.
The Indian low-cost carrier said in a stock market filing that the EGM is scheduled to take place on January 29, 2020. In it, RG Group is proposing to amend the airline's Articles of Association, effectively making it easier for existing shareholders to sell or buy shares in the company.
Currently, if either of the two main shareholders (RG Group or Rahul Bhatia's InterGlobe Enterprises Private Limited - IGE Group) wishes to sell any of their shares, the other has priority in buying them. The Articles of Association also restrict the key shareholders' options when it comes to increasing their shareholdings, and effectively ban them from taking the company private by delisting it from the stock market. If the EGM approves the changes, all of these provisions will be removed.
RG Group controls a 37% stake in IndiGo Airlines with IGE Group owning 38%. The balance of shares is publicly traded on the Indian National Stock Exchange.
Rakesh Gangwal has been in a public dispute with IGE Group since mid-2018. Gangwal accuses Bhatia of enjoying and abusing "unusual controlling rights over IndiGo", which have resulted in significant shortcomings in corporate governance. Bhatia has responded by alleging that Gangwal is trying to gain an undue level of control over the airline.
IGE Group has filed a request for arbitration against RG Group at the London Court of International Arbitration and sued its co-founder in a Maryland District Court.
IndiGo Airlines is the largest airline in India with 10,824 weekly scheduled flights, 1.8 million weekly scheduled seats, and a fleet of 232 Airbus narrowbodies and twenty-five ATR72-600s, the ch-aviation PRO airlines module shows.
