Big relief for Go First as Lenders Approve ₹400 crore interim funding

New Delhi, 26th June 2023: It was reported on Sunday that GoFirst’s lenders have authorised an interim finance of roughly Rs 400 crore, which is a huge relief for the cash-strapped airline.

GoFirst filed for voluntary insolvency resolution procedures with the National Company Law Tribunal (NCLT) last month. The struggling airline stopped flights and was looking for finance to begin domestic operations.

According to the news site, a key banker whose bank is part of the consortium stated the lenders had approved roughly Rs 400 crore to the struggling airline based on the business plan and to support the restoration of operations. According to a banker, lenders have agreed to provide new capital based on the business strategy in order to restart operations.

For the time being, the sum sanctioned is approximately Rs 400 to 450 crore, and lenders may be willing to provide extra contingency finance if needed later for specific events, according to another banker.

Reuters reported earlier this week that Go First had requested additional financing at a banker meeting on Wednesday. The airline requested between 4 billion and 6 billion Indian rupees ($122 million) in more funding, with lenders scheduled to review bids within the next 48 hours.

According to Reuters, Go First expects to resume operations in July, with 78 daily flights and 22 aircraft. Another banker stated that the expected resumption of business is contingent on a number of variables, including regulatory permissions.

The Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank are among the creditors listed in the Go First bankruptcy case, who are due a total of 65.21 billion rupees.

Last month, Go First CEO Kaushik Khona stated that the airline was suffering a financial crisis as a result of Pratt & Whitney engine supply issues, which caused the grounding of its jets. The airline was now looking for a new investor to help it resume domestic flights.