InterGlobe Aviation, a prominent player in the Indian aviation industry, has announced a strategic move to establish a subsidiary dedicated to financing aviation assets. This significant development marks InterGlobe’s expansion beyond its core airline operations.
The board of InterGlobe Aviation Ltd, which operates India’s largest airline IndiGo, on September 4, approved the creation of financial services arms with an initial investment of Rs 30 crore.
The company in a filing to the exchanges outlined that the Board of Directors has approved the incorporation of a Private Limited Company with an initial investment of Rs 30 crore.
The airline’s board has approved the investment which will be setup in the Special Economic Zone at Gujarat International Finance Tec-City, the airline said in an exchange filing with the stock exchanges.
Furthermore, the airline’s board has also approved issuing corporate guarantees worth up to $996 million to secure the payment obligations of the aforesaid wholly-owned subsidiary.
While the airline did not specify the name of the new arm or its exact function, the airline mentioned that the subsidiary would be involved in the financing of aviation assets.
IndiGo’s announcement comes just a few days after Air India became the first major airline to set up a leasing unit at IFSC Gift City in Gujarat.
Last year the government exempted aircraft leasing companies from paying corporate and withholding tax on leasing transactions in a bid to promote aircraft leasing from GIFT City.
