Go First’s lenders approve $55 mn fund infusion to revive carrier: Reports

Two banking sources said lenders to India’s Go First, which is under bankruptcy protection, have approved a temporary financing of 450 crore ($54.9 million) to resume operations and restart the airline.

Go First was granted bankruptcy protection on May 10. Reuters reported last week that the airline had sought Rs 400 crore – Rs 600 crore in additional funds from banks.

One of the bankers said, “This temporary financing does not come with guarantees, rather it will be part of the cost of insolvency and will be given priority over other dues.”

The second banker said the promoters had, however, indicated they had no intention of pouring more money into the airline.

Both bankers did not want to be named because they are not authorized to speak to the media.

Go First’s bankruptcy filing lists the Central Bank of India, Bank of Baroda, IDBI Bank and Deutsche Bank among its creditors, to which the company owes a total of Rs 6,521 crore.

The lenders have now submitted approval for the financing, the two bankers said, and the ball is in the FCA’s court to conduct checks and approve the airline’s business plan. They added that the firm’s resolution specialist would have to handle the process.

Go First’s lessors have slammed the doors with the airline and the Directorate General of Civil Aviation (DGCA) to repossess its aircraft for missed payments, with requests to the oversight body to allow repossession.

Go First plans to operate 78 daily flights with 22 aircraft, according to a company revival plan submitted to lenders last week.