Lenders Of Go First Approve $55-Million Fund Infusion To Revive Airline: Reports

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

Lessors of Go First have locked horns with the airline and the DGCA to reclaim its planes for missed payments, with requests to the watchdog to allow repossession. ( Image Source :Getty )

Lenders to Go First, which is currently under bankruptcy protection, have approved interim funding of Rs 450 crore ($54.9 million) to resume operations and restart the airline, citing two banking sources privy to the development Reuters said. According to the report, Go First was granted bankruptcy protection on May 10.

Last week, the news agency reported that the airline has sought Rs 400 crore-Rs 600 crore in additional funds from banks. "This interim funding does not come with collateral, it will be a part of the insolvency cost and will be given priority over other dues," one of the bankers told Reuters.

The promoters, however, have indicated that they do not intend to infuse more funds into the airline, the second banker said. Both bankers did not wish to be named because they were not authorised to speak to the media.

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

Now that lenders have given funding approval, the ball is in the aviation watchdog's court to make checks and approve the airline's business plan, both the bankers said. The company's resolution professional will have to handle that process, they added.

Lessors of Go First have locked horns with the airline and the Directorate General of Civil Aviation (DGCA) to reclaim its planes for missed payments, with requests to the watchdog to allow repossession.

Meanwhile, the crisis-hit airline has extended the cancellation of its scheduled flight operations until June 28 due to operational reasons.

Earlier, Go Air had announced the flight cancellation until June 25. The Wadia Group-owned airline, which ceased operations on May 3, is reportedly facing challenges in paying senior-level executives and pilots. The grounding of Go First flights has reportedly influenced airfares, particularly on routes where the airline had a significant presence.

Go First plans to operate 78 daily flights with 22 aircraft, as per the company's revival plan presented to lenders last week.