Lenders to India’s Go First, which is under bankruptcy protection, have approved interim funding of 4.50 billion rupees ($54.9 million) to resume operations and restart the airline, two banking sources said.
Go First was granted bankruptcy protection on May 10. Reuters reported last week that the airline has sought 4 billion – 6 billion rupees in additional funds from banks.
“This interim funding does not come with collateral, it will be a part of the insolvency cost and will be given priority over other dues,” said one of the bankers.
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The promoters, however, have indicated that they do not intend to infuse more funds into the airline, the second banker said.
Both bankers did not wish to be named because they were not authorised to speak to the media.
The Go First bankruptcy filing lists Central Bank of India, Bank of Baroda, IDBI Bank and Deutsche Bank among its creditors, to which the airline owes a total of 65.21 billion rupees.
Now that lenders have given funding approval, the ball is in the aviation watchdog’s court to make checks and approve the airline’s business plan, both the bankers said. The company’s resolution professional will have to handle that process, they added.
Lessors of Go First have locked horns with the airline and the Directorate General of Civil Aviation (DGCA) to reclaim its planes for missed payments, with requests to the watchdog to allow repossession.
Go First plans to operate 78 daily flights with 22 aircraft, as per the company’s revival plan presented to lenders last week.
($1 = 81.9550 Indian rupees)
