Tuesday, 27 June 2023, Bengaluru, India
Go First Airline, which previously appealed for insolvency, finally gets a funding grant worth ₹ 400 crores. As per the latest reports, Go First’s lenders have agreed to accept the airline’s substantial investment worth ₹400 crores to restart its flight operations.
The airline company halted operations recently due to operational failures and had to shut down all flight endeavors immediately. Go First temporarily shut down operations on May 2nd only to find the airline carrier company initiate a revival plan. Considering the goal was to bring back the Go First into the process, the airline company had pleaded for insolvency. The National Company Law Tribunal (NCLT) admitted the plea on May 10.
With the insolvency plea being accepted, a revival plan was on course to resurrect Go First Airline and bring the company into action soon. With every piece of the plan in order, it was about time the company started its operations.
After coming out of trouble, Go First’s primary step was to ask for funding from its lenders. Resolution professional Shailendra Ajmera at Go First’s helm, it was imminent he would file for an urgent funding need. Ajmera submitted the airline’s business plans and requested over ₹400 crores of revival funding to the airline’s committee of creditors (CoC).
While the airline was on the verge of dissolution, an insolvency plea was accepted, and soon after the airline company contacted the committee of creditors. Looking at the amount being asked as funds, it seemed to Go First’s business model had everything to satisfy the committee and make them able to grant the funding application.
Go First’s CoC comprises Go First’s lenders, namely, Bank of Baroda, Central Bank of India, Deutsche Bank, and IDBI Bank. These financial institutes, or lenders, have a collective grasp of over ₹6500 crores in the airline’s business. Representatives from every institute met again on Thursday after the initial funding application was accepted n Wednesday. On Thursday, the representatives met again to discuss the funding request the airline made a few days back.
As of present circumstances, the representatives have given the nod for the huge revival funding to Go First but additional funding would require approval from respective banks. This process will come into play once the DGCA clears the Go First business plan. Sources with strong knowledge of this matter say that the additional funding will act as interim finance, which has priority over all other debt under the insolvency process.
The revival plan Go First Airlines wants to enact consists of 150 daily operational flights and charter flights for defense forces. With such claims, the main concern remains Go First’s financial sustainability, airworthiness, and consumer interest. With a strong business plan and aiding everyone’s interest, Go First is hopeful to launch all operations from July 1. The airline company needs DGCA’s approval for resuming operations and the sale of flight tickets.
Source – Rediff
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