Go First, the budget airline, which filed for bankruptcy on Tuesday, owes financial creditors Rs 6,521 crore ($798 million), its bankruptcy filing showed, as reported by news agency Reuters. As of April 30, Go First had not defaulted on any of these dues, it said in the filing, which was seen by the news agency.
According to the filing, "However, considering the present financial situation of the corporate applicant, defaults to financial creditors would be imminent.”
Lenders were not aware of the airline's plans to file for voluntary insolvency and will meet soon to take stock of the situation, said two sources privy to the development. They spoke on condition of anonymity as they are not allowed to speak to the media.
The filing lists Central Bank of India, Bank of Baroda, IDBI Bank, Axis Bank, and Deutsche Bank among Go First's financial creditors. Deutsche Bank, however, declined to Reuter’s request for comment. Emails sent to the other banks were not immediately answered.
The airline's total liabilities to all creditors stand at Rs 11,463 crore, the filing shows. This includes dues to banks, financial institutions, vendors and aircraft lessors. "Currently, the assets of the company are not sufficient to meet its liabilities," the airline said in the filing.
The airline has defaulted on payments to operational creditors, including Rs 1,202 crore to vendors and Rs 2,660 crore to aircraft lessors. It has received notices from lessors for termination of aircraft lease agreements and some have started actions against the company to ground or repossess aircraft, the filing said.
Six lessors have also invoked letters of credit issued to them by lenders, it said.
Meanwhile, a day after Go First filed for insolvency protection, its engine supplier Pratt & Whitney (P&W) said that the airline has a "lengthy history of missing its financial obligations," ANI reported citing Pratt and Whitney officials.
In a statement, the engine maker stated, "Pratt & Whitney is committed to the success of our airline customers, and we continue to prioritize delivery schedules for all customers. Pratt & Whitney is complying with the March 2023 arbitration ruling related to Go First. As this is now a matter of litigation, we will not comment further."