Sunday, June 25, 2023

Go First lenders grant in-principle nod for Rs 425 crore interim financing to fly again

In a significant development, lenders have given an in-principle nod for approximately Rs 425 crore interim financing to cash-strapped airline Go First, three people directly aware of the matter told CNBC-TV18.

The interim financing is intended to support the day-to-day operations of the airline and facilitate its revival, according to people in the know.

The decision to grant interim financing was made after a creditors committee meeting held earlier this week, and the voting to approve the interim financing in-principle concluded on Saturday, said sources.

However, the final approval from the banks is contingent upon the Directorate General of Civil Aviation (DGCA) granting permission for Go First to restart its operations, banking executives who didn’t wished to be identified told CNBC-TV18.

“We will seek individual board approval for financing only once there is assurance from DGCA about restarting Go First operations. As of now, this is only in-principle approval which IRP (insolvency resolution professional) had sought,” said one of the bankers to the airline. This move underscores the cautious approach taken by the lenders, ensuring that the airline has the necessary regulatory clearance before disbursing funds.

Go First, formerly known as GoAir, has been grappling with financial difficulties, which led to its admission into the Insolvency and Bankruptcy Code (IBC) on May 10. The airline has outstanding debts amounting to Rs 6,521 crore, owed to various banks including Central Bank of India, Bank of Baroda, Deutsche Bank, and IDBI Bank.

25/06/2023 Ritu Singh/CNBC TV18

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