MUMBAI- Wadia-owned airline Go First (G8) has requested emergency funding of Rs 100 crore from its creditors to ensure financial stability.
The airline’s resolution professional, Shailendra Ajmera, supported by EY, has initiated this funding appeal to address essential obligations like insurance.
Go First Need Emergency Funds
As per a report in The Economic Times, the airline will allocate the funds for vital expenditures to the committee of creditors, as explained by the RP.
A source informed the publication that the funds are intended for crucial needs such as insurance and maintenance, which are vital for sustaining Go First’s operations.
As per the report, the banks have sought funds based on their respective voting shares within the Committee of Creditors (CoC).
This funding request has been directed to the corporate headquarters of the Central Bank of India and the Bank of Baroda. A decision on this matter is anticipated to be reached within a few days.
In terms of voting shares, the Bank of Baroda and Central Bank collectively hold a 72 percent share, Deutsche Bank holds a 25 percent share, and IDBI Bank holds the remaining portion.
In the meantime, it has been reported that Deutsche Bank has informed RP Shailendra Ajmera about its resolution of loans with the Wadia Group, the promoters.
Additionally, the bank has expressed its intention to withdraw from its role as a Committee of Creditors (CoC) member. This decision is based on the fact that its debt has been resolved independently with the promoter.
According to an independent financial report, Deutsche Bank originally filed an unsecured creditor claim of Rs 1,365 crore during the initial stages. However, the bank has not provided details about the manner in which the debt settlement was concluded.
Cannot Fly Lessors’ Aircraft
On Thursday (August 3, 2023), the Delhi High Court ruled that the concept of scheduled maintenance does not encompass the operation of aircraft, and it prohibited the financially distressed airline Go First (G8) from discontinuing maintenance flights.
The court emphasized that the resolution professional (RP) appointed under insolvency regulations to oversee the airline’s affairs has not demonstrated any immediate urgency or significant impending danger to the aircraft that would necessitate their abrupt and unannounced operation.
Justice Tara Vitasta Ganju, who had previously issued an order on July 28 to uphold the current state of affairs concerning the petitioner lessors’ aircraft’s handling and non-revenue flights until August 3, has extended this interim directive until further notice.
The high court characterized the argument put forth by the RP as “misconceived” regarding the operation of two out of the ten aircraft by Go Airlines.
The court clarified that these flights were related to handling tasks and were part of the scheduled maintenance procedure for an aircraft.
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