Awaiting Board approval, Go First creditors agree a Rs 425 million interim financing to resuscitate the airline

26 Jun 2023 , 11:12 AM

Struggling with cash, airline creditors of Go First have authorized an interim loan of Rs 425 crore for the airline. While the temporary financing has received in-principle approval, it is still pending board approval from relevant institutions.

Go First has a group of lenders, including IDBI Bank, Bank of Baroda, and Central Bank of India, who will seek permission from the board to sanction the interim funding. Subsequently, DGCA clearance will be requested before the airline can resume operations.

According to sources, Shailendra Ajmera, the resolution specialist for the low-cost carrier, has requested Rs 425 crore in temporary funding from the airline’s lenders to kickstart a revival plan that would aid in restarting operations. The required funding amount may increase based on factors such as the availability of functional aircraft engines and ticket cancellations.

The funding request was presented to the Go First committee of creditors during a meeting earlier in the week. Reports suggest that Go First aims to resume operations in July, operating 22 planes on 78 daily flights. The airline’s aircraft have been grounded since May 3 due to financial difficulties.

Go First’s bankruptcy filing lists creditors totaling Rs 6,521 crore, including Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank.

During the suspension of Go First’s aircraft, airfares were reportedly under pressure, particularly on routes where the airline had a significant presence.

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