Deccan Aviation - Utilisation of Initial Public Offering proceeds
Deccan Aviation Ltd has informed BSE that the Board of Directors of the Company at its meeting held on March 18, 2008, has approved the transfer of the unutilised amounts against stated purposes as disclosed in the Company’s IPO Prospectus representing savings, and / or funds no longer required to be utilised for the purposes as stated in the Company’s IPO Prospectus, for utilisation under General Corporate purposes.
Chapter III of the prospectus Issued by the Company relating to the IPO has outlined the objects of the issue and the projected requirements of funds for each of these objects. The proceeds of the issue were to be utilised as follows:
1. Description: Setting up a training centre
Estimated Funds Requirement: Rs 656.69 million
2. Description: Setting up a hangar facility for basic and medium level maintenance checks at Chennai
Estimated Funds Requirement: Rs 400.20 million
3. Description: Setting up Infrastructure at airports
Estimated Funds Requirement: Rs 170.83 million
4. Description: Market Development Initiatives
Estimated Funds Requirement: Rs 458.20 million
5. Description: Debt repayment
Estimated Funds Requirement: Rs 1327.50 million
6. Description: General Corporate Purposes
Estimated Funds Requirement: Rs 419.53 million
7. Description: Issue Expenses
Estimated Funds Requirement: Rs 205.86 million
The prospectus provides that the estimations for the deployment of the proceeds for each object were arrived at, based on Internal management estimates, at the time of the IPO. It is also set forth in the prospectus that, the balance amount of the issue proceeds available after meeting the funds requirements for items (1) to (5) above, and the issue expenses, would be deployed for general corporate purposes.
Owing to the dynamic state of the Aviation Industry and the circumstances of the Company, there have been savings in the estimated Costs, relating to the stated purposes, as also non utilisation of funds outlay in respect of certain stated purposes.
As a result, in terms of the aforesaid Board Resolution, out of the balance of IPO proceeds, an amount of Rs 13,142.00 lakhs would be transferred to the head “General Corporate Purposes” for the Quarter ended March 31, 2008, from out of savings / non utilisation in respect of stated purposes as under:
- Setting up a training centre : Rs 6567.00 lakhs
- Setting up a hangar facility for basic and medium level maintenance checks at Chennai: Rs 2856.00 lakhs
- Setting up infrastructure at airports : Rs 883.00 lakhs
- Market Development Initiatives: Rs 750.00 lakhs
- Debt Repayment: Rs 2086.00 lakhs
Accordingly, the funds utilised under the heading General Corporate purposes as of March 31, 2008 would be Rs 22,439 lakhs as against the estimated Rs 4,195.30 lakhs stated in the
Prospectus.
Tags: Deccan Aviation