TBM Staff - Mumbai In a critical development, lenders of the embattled domestic carrier Go First, founded by billionaire Nusli Wadia, are reportedly leaning towards approving a proposal to liquidate the airline. Despite facing multiple deadlines to resolve its ongoing debt crisis, the airline has been unable to meet the requirements, prompting discussions among lenders.
Sources familiar with the matter, including bankers and airline officials who chose to remain anonymous due to the sensitivity of the situation, revealed that a vote on the proposal for liquidation could take place as early as this week, according to a Money Control report. Go First is grappling with a debt of INR 6,521 crore owed to various lenders, with Central Bank of India having the highest exposure at INR 1,987 crore, followed by Bank of Baroda at INR 1,430 crore, Deutsche Bank at INR 1,320 crore, and IDBI Bank at INR 58 crore. The airline’s failure to navigate its financial challenges may lead to a significant decision that could impact its future.
Insiders familiar with the ongoing negotiations between Go First Resolution Professional Shailendra Ajmera and the Committee of Creditors (CoC) revealed that the CoC has appraised the airline’s assets at approximately INR 3,000 crore. With the end of the 270-day deadline prescribed under the Insolvency and Bankruptcy Code (IBC) fast approaching, the CoC is purportedly leaning towards a vote for liquidation this week. The INR 3,000 crore valuation of Go First’s assets is expected to be distributed among customers, travel agents, banks, and other lenders through auction proceedings.
A senior banker from one of the lending institutions has signalled that the liquidation of Go First may be imminent. The decision not to extend the timeline for the submission of a resolution plan has been approved, paving the way for potential liquidation, according to the banker.
As of the time of publishing, attempts to elicit a response from Go First through emails remained unanswered. Similarly, emails directed to the lenders went unanswered by the time this report was filed.
