An interim funding of Rs 400 crore has been approved by the airline's lenders, a key milestone in efforts to keep the struggling airline afloat, according to at least three people familiar with the matter who spoke to Moneycontrol.
The Committee of Creditors (CoC) that includes the Central Bank of India, Bank of Baroda, Deutsche Bank and IDBI Bank approved the request for additional funding on Saturday night. Recently, Go First had knocked on lenders' doors promising to resume operations as soon as possible.
According to a top banker whose bank is part of the consortium, around Rs 400 crore has been approved for Go First based on its business plan and to assist in the revival of its operations.
The banker on strict condition of anonymity told Moneycontrol, “(Lenders have agreed for fresh funding) based on the business plan and to revive operations. The amount is around Rs 400 crore.”
A second person aware of the development confirmed this development and told Moneycontrol, "Yes, the committee of creditors have given the go ahead to the interim finance request following a voting process which took place on Saturday.”
A third person, who too spoke on condition of anonymity told Moneycontrol, "For now, the amount approved is around Rs 400 crore to 450 crore, and lenders may be open to additional contingency funding as and when required later for specific events."
Go First owes Rs 6,521 crores to its lenders. Acuite Ratings and Research stated in a January 19 report that the Central Bank of India had the highest exposure with Rs 1,987 crore. After that, Bank of Baroda had Rs 1,430 crore, Deutsche Bank had Rs 1,320 crore, and IDBI Bank had Rs 58 crore.
DGCA nod awaited
Now that lenders have extended a helping hand, all eyes are on the Director General of Civil Aviation, which is in the process of reviewing an application filed by the airline to reopen. The second person that spoke to Moneycontrol said, "All eyes are now on DGCA which is likely to take a call on clearance following inspection of fleet and other checks. The hope is to start flying as soon as possible.”
Go First needs the aviation regulator's nod to kickstart operations and it plans to start operations on July 1 across 78 routes using around 22 aircraft.
In a business plan submitted this week, Ajmera had requested over Rs 400 crores to restart its operations.
