MUMBAI- Cash-strapped Go First (G8) has received approval from its creditors for interim restart funds of Rs 425 crore to revitalize the airline. The approval is subject to the respective banks’ board members granting their consent, as confirmed by sources familiar with the matter.
Central Bank of India, Bank of Baroda, and IDBI Bank, the consortium lenders of Go First, will seek board approvals to finalize the interim finance arrangement.
Following this, the airline will approach the Directorate General of Civil Aviation (DGCA) for necessary approvals to recommence its operations.
Go First Restart Funds
Multiple sources have revealed that Go First’s resolution professional, Shailendra Ajmera, requested Rs 425 crore in interim finance from the airline’s financiers to initiate a revival plan to facilitate operations’ resumption.
According to insiders, the financing requirement may increase due to various factors. Further, including the availability of working aircraft engines and potential ticket cancellations.
The proposal for funds is presented to the committee of creditors of Go First during a meeting held earlier this week. Further indicating progress in the airline’s efforts to overcome its financial challenges.
Flight Resumption Plans
Go First aims to recommence operations in July, operating 78 daily flights utilizing a fleet of 22 aircraft. Subsequently, the airline’s planes have been grounded since May 3, contributing to its financial difficulties.
As revealed in the bankruptcy filing, the list of Go First’s creditors includes the Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank, with a total outstanding amount of Rs 6,521 crore.
Go First filed for bankruptcy in early May at the National Company Law Tribunal (NCLT). Further, it suspended its flight operations due to mounting losses caused primarily by delays in the delivery of Pratt and Whitney’s engines. Subsequently leading to the grounding of a significant portion of its fleet.
The airline is hopeful for a swift resolution and the subsequent revival of its operations.
Furthermore, reports have indicated that the grounding of Go First flights has placed pressure on airfares. Particularly on specific routes where the airline had a significant presence.
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