Deutsche Bank provided a loan of USD300 million to Leila Lands, a Wadia Group-owned investment holding based in Mauritius, which in turn opened fixed-term deposits worth USD191 million that Go First (Mumbai International), another Wadia company, used to secure financing from Deutsche Bank, according to security filings in India, Mauritius, and the United Kingdom seen by the Indian newspaper The Economic Times.
Leila Lands confirmed to the daily that it took the loans in 2021 and 2022 and created the fixed-term deposits during the same period, claiming that the deposits had been opened with its own accumulated cash earnings.
It “has over the years made significant equity investments in Go Air (India) Limited [Go First] as promoters,” and it “has provided security to Deutsche Bank by way of a fixed deposit of USD191 million, out of its own accumulated retained cash earnings, to advance financial assistance to GoAir.”
It added: “A loan of USD300 million has been provided by DB to LLL Group [Leila Lands] for use in corporate purposes and investments. As is customary in loan financing, ABIL, part of LLL Group, has provided a lien on its inflows.”
Go First, which secured bankruptcy protection from its creditors on May 10, told the newspaper that it had received a financial facility of INR13.2 billion rupees (USD160 million) from Deutsche Bank India but denied any knowledge of the fixed-term deposits, adding: “We are not aware of any such arrangement.”
The German investment bank’s total exposure to Wadia Group is hard to estimate, as loans have been provided to more than one company within the Mumbai-based conglomerate, and in different jurisdictions. The depth of its exposure could influence the say it has in Go First’s insolvency proceedings once a committee of creditors is formed. Deutsche Bank has declined to comment on the matter.
Go First owes banks a total of INR65.21 billion (USD793 million) and defaults to these financial creditors are “imminent”, it was revealed earlier this month. Of this sum, three Indian public-sector banks are collectively owed around INR34 billion (USD413 million).
Hajj reallocation
In related news, the Indian government has decided to reallocate the Hajj flights that Go First was originally meant to operate, the Press Trust of India reported. The decision came in light of Go First’s cancellation of all of its flights from May 3 but came also as the airline pledged to resume flights by May 24. The Hajj flights previously allocated to Go First will now be operated by IndiGo Airlines, Saudia, and flyadeal. Go First had been due to operate the flights from ten embarkation points, starting later in May and continuing until the second week of July.
