Go First: The airline needs Rs 425 crore to fly again, claims - waiting for the approval of the lenders
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Go First may need more funding depending on the availability of working engines for future flights and certain contingencies like ticket cancellations.
Go First's resolution professional Shailendra Ajmera has sought Rs 425 crore in interim finance from airlines financiers to chalk out a revival plan and help the airline resume operations. Explain that Shailendra Ajmera has been appointed as the resolution professional (RP) in the bankruptcy case of GoFirst. The committee of creditors (CoC) of the crisis-hit airline has taken this decision. The lenders have taken approval from NCLT to make them RP (Resolution Professional) for GoFirst.
Sources quoted media reports as claiming that the funding requirement may increase further depending on the availability of fit engines for aircraft in future and some contingencies like ticket cancellations. It is reported that this proposal related to financing was put before the committee of creditors of GoFirst in a meeting held earlier this week.
These banks are included in the committee of creditors of the airline
Explain that the committee of lenders of GoFirst includes Central Bank of India, Bank of Baroda, IDBI Bank and Deutsche Bank. Ajmera, which is supported by the committee of creditors, is yet to comment officially on the matter. Other banks including Central Bank of India have also not commented on this at present.
GoFirst is yet to get its nod from the country's aviation sector regulator Directorate General of Civil Aviation (DGCA) to resume airline operations. But this approval will be given only after ensuring the availability of funding for the airline.
GoFirst has to seek approval of the financing proposal from lenders before obtaining regulatory consent to resume operations. Media reports claim that the airlines' creditors have given their in-principle approval for the financing, while some creditors say they are waiting to get clarity from the aviation regulator before approving the interim finance proposal.
NCLT had accepted the resolution petition of Go First on 10 May
GoFirst has filed for insolvency proceedings under Section 10 of the Insolvency and Bankruptcy Code (IBC), which allows a company to voluntarily enter the court process for debt resolution. The National Company Law Tribunal (NCLT) accepted the insolvency petition of GoFirst on May 10.
GoFirst owes around Rs 6,000 crore to banks and financial institutions. In its application for voluntary insolvency at the NCLT, GoFirst said it has defaulted on payments of Rs 2,600 crore to aircraft lessors and Rs 1,200 crore to vendors. The company said it has filed for bankruptcy because several of its planes have been grounded due to defective engines supplied to it by US aerospace manufacturer Pratt & Whitney.
