Emergency cash lifeline for India's Go First

Go First (Mumbai International) has secured emergency funding of INR1 billion Indian rupees (USD12.1 million), with the money covering the day-to-day running costs of the grounded airline, including salaries, insurance, and aircraft maintenance and parking costs.

According to India's Hindu Business Line outlet, three lenders controlling 98% of the voting rights approved the funding after an urgent plea from Go First's resolution professional earlier this month. The regulations governing the country's Corporate Insolvency Resolution Process (CIRP) require 66% of lenders to approve any further funding while the insolvency process is underway. However, during an August 23 meeting, the Central Bank of India (which controls a 51.5% voting bloc), the Bank of Baroda (which controls a 46.5% voting bloc), and the IDBI Bank (which controls 1.98% of the voting bloc), all okayed the emergency funding.

Go First ceased operations in early May and soon after filed for voluntary administration. It has recently cancelled flights through August 31. As previously reported in ch-aviation, these three banks have so far had claims worth INR37.524 billion (USD453.9 million) verified by the resolution professional. The Bank of Baroda has verified claims of INR17.44 billion (USD211 million), the Central Bank of India has verified claims of INR19.24 billion (USD232.7 million), and the IDBI Bank has verified claims of INR740 million (USD9 million). The banks have generally supported Go First's planned restart and indicated an in-principle willingness to extend funding, but in-house guidelines restricting further loans to distressed entities and ongoing uncertainty surrounding Go First's future fleet have, to date, held up any capital infusions.

Meanwhile, the Hindu Business Line reports that 1,000 of Go First's remaining 2,200 employees are serving out their notice periods and that all salaries have been paid until at least the end of June. The airline presently has 103 captains, 26 first officers, and 374 flight attendants still on its books.