Go First’s resolution professional Shailendra Ajmera has sought Rs 425 crore in interim finance from the airlines financiers to get a revival plan going that could help restart operations, according to multiple sources.
The requirement for financing could expand based on certain contingencies such as the availability of working engines for the aircraft and ticket cancellations, the sources said.
The proposal for funds was put up to the committee of creditors of Go First at a meeting that took place earlier this week.
The committee of creditors includes Central Bank of India, Bank of Baroda, IDBI Bank and Deutsche Bank.
Ajmera who is backed by EY did not respond to requests for comment. Central Bank of India executives were unavailable for comment.
India’s aviation regulator, directorate general of civil aviation (DGCA), has to give its approval for the airline to restart operations.
That approval is subject to the availability of financing for the airline.
Creditors will have to approve the financing proposal before the aviation regulator gives its consent for the airline to restart operations. However, certain sources said the airlines creditors are awaiting clarity from the aviation regulator that the airline will be allowed to restart before they approve an interim finance proposal.
Go First filed for insolvency under Section 10 of the Insolvency and Bankruptcy Code (IBC), which allows a company to voluntarily submit itself to a court process for debt resolution when its business becomes unviable.
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National company law tribunal (NCLT) admitted the insolvency petition on 10 May.
Go First’s total dues to banks and financial institutions are pegged at around Rs 6,000 crore. In its application for voluntary insolvency with NCLT, Go First said it had defaulted on payments of Rs 2,600 crore to aircraft lessors and of Rs 1,200 crore to vendors. The company said it had filed for insolvency because several of its aircraft remained grounded due to defective engines supplied by US-based aerospace manufacturer Pratt and Whitney.
