The lenders of Go First have made a preliminary decision to approve the airline’s request for INR 400 crore in emergency cash to resume operations.
The airline temporarily ceased operations on May 2, and on May 10 the National Company Law Tribunal (NCLT) accepted the carrier’s insolvency plea. Shailendra Ajmera, the airline’s resolution specialist, gave the committee of creditors (CoC) a business plan and a proposal for more than INR 400 crore in finance last week.
The CoC is made up of Go First’s lenders, including Bank of Baroda, Central Bank of India, Deutsche Bank, and IDBI Bank, who have a combined exposure to the airline of more than INR 6,500 crore. Reps from the bank gathered once more to go over the cash request from the airline.
Although the lenders have given their in-principle approval, the additional funding still needs the boards of the different banks’ approval. Once the DGCA approves the plans, this will take place.
The extra money would be considered interim financing, which is given precedence over all other debt during the insolvency process. “Lenders are trying for a unanimous decision, so that all lenders loan extra funds,” the insider claimed.
With 22 aeroplanes, Go First intends to fly around 150 flights every day. In the beginning, the airline also intends to run charter flights for the armed forces.
Along with informing DGCA officials about their efforts to resume operations, Ajmera and top executives also addressed their concerns. The regulator’s top priorities are the financial viability, airworthiness, and customer interests of the airline. Go First requires the DGCA’s clearance in order to launch operations on July 1 and sell tickets for it.
While efforts to revive the situation are in progress, Go First is opposing Pratt & Whitney’s (P&W) request for a stay of an arbitral ruling. The Singapore International Arbitration Centre granted it temporary relief on March 30, ordering P&W to provide the airline with a specific number of spare engines through December 2023.
A minimum of 10 serviceable spare leased engines were to be released immediately by P&W within 28 days of the order, and an additional 10 spare leased engines were to be released each month until December.
Source : The Hindu Business Line
