Go First Secures Rs 400 Crore Interim Funding as Lenders Extend Support
Go First, formerly known as GoAir, has received a significant boost as its lenders have approved interim funding of approximately Rs 400 crore, providing a much-needed relief to the cash-strapped airline. The approval comes after Go First filed for voluntary insolvency resolution proceedings before the National Company Law Tribunal (NCLT) last month, leading to the cancellation of its flights and a search for funding to restart its domestic operations.
Go First, formerly known as GoAir, has received a significant boost as its lenders have approved interim funding of approximately Rs 400 crore, providing a much-needed relief to the cash-strapped airline. The approval comes after Go First filed for voluntary insolvency resolution proceedings before the National Company Law Tribunal (NCLT) last month, leading to the cancellation of its flights and a search for funding to restart its domestic operations.
According to a report by Moneycontrol, the Committee of Creditors (CoC), which includes prominent banks such as the Central Bank of India, Bank of Baroda, Deutsche Bank, and IDBI Bank, has given the green light for additional funding. Three sources familiar with the matter confirmed the approval. A top banker from the consortium stated that the lenders have sanctioned around Rs 400 crore based on the airline’s business plan, aimed at supporting the revival of operations.
While the approved amount currently stands at approximately Rs 400 to 450 crore, the lenders have shown openness to providing additional contingency funding as and when required for specific events, explained another banker. Reuters had earlier reported that Go First had presented its funding requirements at a lenders’ meeting, seeking between 4 billion and 6 billion Indian rupees ($122 million) in additional funds. The proposals were expected to be evaluated within the next 48 hours.
Go First is making preparations to resume operations in July and aims to operate 78 daily flights with its fleet of 22 aircraft, according to a banker cited by Reuters. However, the resumption of operations is contingent upon various factors, including regulatory approvals, as stated by another banker. The airline’s bankruptcy filing lists the Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank as its creditors, owed a total of 65.21 billion rupees.
Last month, Go First CEO Kaushik Khona highlighted the airline’s financial struggles, primarily caused by the non-supply of engines by Pratt & Whitney, which resulted in the grounding of its planes. In order to restart its domestic operations, the airline is actively seeking an investor.
The approval of interim funding provides a glimmer of hope for Go First as it navigates through the insolvency resolution process and works towards resuming its operations, aiming to regain stability in the highly competitive Indian aviation industry.
Sources By Agencies
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