MUMBAI- As part of the ongoing insolvency proceedings, Go First (G8) has received claims worth Rs 24,000 crore (US$2.9 billion) from both functional and monetary creditors, according to two banking sources who informed Reuters.
The claims submission process is in line with the procedural requirements set forth by Indian law, which grant every creditor the right to seek payment and remedy if a company undergoes bankruptcy.
Following the filing of claims, the resolution professional is responsible for verifying their authenticity.
Go First Gets Claims From Creditors
A banker from a state-run bank with exposure to Go First revealed that the lenders’ claims are approximately Rs 5,000 crore, while lessors’ claims currently amount to Rs 180 crore.
The figures were shared after a meeting of the committee of creditors on Friday. The sources requested anonymity since they were not authorized to speak to the media.
Go First, the carrier formerly operating as Go Airlines, filed for bankruptcy protection in May. Subsequently, its financial challenges were attributed to “faulty” Pratt & Whitney engines, which led to roughly 26 Airbus A320neos grounding.
Raytheon, the engine maker, which owns Pratt & Whitney, refuted the claims, stating they are without merit.
Investor Interest Invited
Earlier this month, the company initiated the process of seeking investor interest through a court-appointed administrator. Interested parties have been asked to submit an expression of interest (EoI) by August 9.
While the airline has received 40 questioning on EOIs from probable bidders, no formal proposals have been made thus far.
The resolution professional is currently awaiting banks to disburse funds. Further, they received in-principal approval last month to facilitate the resumption of operations.
Go First’s financial future remains a subject of close observation as creditors seek a resolution to the insolvency situation amid the airline’s efforts to attract potential investors.
Go First to Restart Flights with Conditions
The Directorate General of Civil Aviation (DGCA), India’s aviation regulator, has approved Go First (G8) Airlines’ plan to resume operations. However, the acceptance comes with certain conditions, as stated in a notification issued on Friday.
According to the DGCA’s notification, Go First is permitted to recommence flight operations provided it adheres to all the necessary regulatory requirements for holding an Air Operator Certificate. The airline must also ensure the airworthiness of all aircraft involved in its operations.
The company cannot deploy any aircraft for operations without conducting a satisfactory handling flight. Any changes in the company that may impact the submitted resumption plan must be promptly communicated to the DGCA.
Go First informed its customers via Twitter that all flights are canceled until at least July 23, 2023, due to operational reasons. The DGCA had previously announced that it would conduct a special audit of Go First’s facilities in Mumbai and Delhi.
The airline intends to restart flights as soon as possible, with 22 aircraft in its fleet.
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