Go First’s lenders to wait for NCLT decision on insolvency petition

Lenders to financially troubled Go First Airlines decided Wednesday to wait for the National Corporations Law Tribunal (NCLT) decision on the airline’s decision application and hear from the company before making a call about how best to protect their interests.

In a meeting, the lenders assessed the situation created by the airline filing for settlement proceedings under the Insolvency and Bankruptcy Act 2016. Banks, including Central Bank of India (CBoI), Bank of Baroda (BoB), Deutsche Bank and IDBI Bank, collectively offer about Rs 6,500 crore Wadia-owned airline.

The airline claimed to have grounded 28 aircraft, which represented more than half of its fleet, due to the non-supply of engines by Pratt & Whitney (P&W). Escalating dues from sellers and landlords have also added to its woes.

little exposure

CBoI said on Wednesday that its outstanding exposure to Go First Airlines as on March 31, 2023 was Rs.1,305 crore. An additional Rs 682 crore has been sanctioned under the emergency credit line guaranteed by the Government of India.

“Our exposure to the company is only 0.91 percent of our total advances as of March 31, 2023, and interest collected up to April 30, 2023, is serviced by the company,” the public sector bank said in a regulatory filing. The bank confirmed that in its recently published financial results for FY23, it made contingency provisions of more than Rs 1,500 crore to strengthen the balance sheet.