Lenders to Go Airlines (India) Ltd will classify their loans to the company as "non performing" in the current quarter, but are hopeful that the collateral backing the credit would reduce the amount of haircut they have to take, two banking sources said on Thursday.
The low-cost carrier was granted bankruptcy protection by a company court on Wednesday, which also halted repossession of planes by lessors.
"As per norms, the account will have to be declared a non-performing asset in the current quarter, and that will be done," one of the bankers said. "The account will also have to be provided for."
The bankers did not wish to be named because they are not authorised to speak to media.
The Indian central bank's rules for handling substandard assets says banks have to provision for at least 15% of total outstanding loans on secured assets in the first 12 months.
The Go First bankruptcy filing lists Central Bank of India Ltd, Bank of Baroda Ltd, IDBI Bank Ltd and Deutsche Bank among its financial creditors, which are owed 65.21 billion rupees ($797.38 million)in total.
11/05/2023 Reuters/Economic Times
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