NCLT to hear Go First’s bankruptcy plea today

4 May 2023 , 07:04 AM

Go First’s insolvency petition will be heard by India’s bankruptcy court today, May 4th .

Go First, which is owned by the Wadia group, announced on Tuesday that it has filed for insolvency resolution because it is unable to pay its debts and that 50% of its fleet has been grounded due to ‘faulty engines’ manufactured by the US business Pratt & Whitney.

According to its bankruptcy petition, Go First, which made its bankruptcy filing on Tuesday, owes its creditors Rs6,521 crore ($798 million). Go First’s financial creditors are listed in the filing as Central Bank of India Ltd, Bank of Baroda Ltd, IDBI Bank Ltd, Axis Bank Ltd, and Deutsche Bank.

According to the filing, the Central Bank of India and Bank of Baroda each have exposure under a consortium loan of Rs1,300 crore, while IDBI Bank has a lower exposure of Rs50 crore.

In accordance with a Central Bank of India official who talked to ET, the bank has a total exposure of Rs2,000 crore to the airline. The document stated that the airline has a letter of credit sanction from Axis Bank without mentioning if this credit has been used.

The airline has stated that its insolvency petition does not call for the sale of the company, and the promoter Wadia group is not considering leaving the carrier. Thousands of jobs are also in jeopardy, in addition to worries about the health of the institutions.

We are making every effort to handle the matter with the greatest care and consideration for every employee, Khona told Reuters.

According to PTI, Khona today briefed staff that the airline’s fleet was so small that Go First was unable to produce enough money to pay its lessors due to ongoing Pratt & Whitney engine issues. Lessors are using force, according to Khona as well.

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