Go First (Mumbai International) has settled out of court the loans it owes to Deutsche Bank, according to India's Economic Times. Consequently, the German bank has told the airline's committee of creditors that it intends to withdraw from the group. Although Deutsche Bank confirmed the settlement, it did not disclose the terms.
The bank's claims against the airline stood at INR13.65 billion Indian rupees (USD164.1 million) in June, although at the time, Go First's resolution professional was yet to verify that claim. However, reports say the bank provided loans worth USD300 million to Go First's owners, the Wadia Group, over 2021 - 22. A portion of that funding, USD190 million, was used to create fixed deposits which, in turn, was used as security to help finance Go First.
The bank's claims against Go First, which were unsecured, included INR8.55 billion (USD102.8 million) lent by Deutsche Bank India and INR5.1 billion (USD61.3 million) lent by DB International Asia and the India-based Catalyst Trusteeship. The Economic Times says that of the INR246.41 billion (USD3 billion) in claims filed against Go First, the resolution professional, India's equivalent of an insolvency administrator, has only verified claims worth INR51.17 billion (USD615.3 million).
While Deutsche Bank may be exiting the Go First insolvency process, a raft of other creditors remain, including three major Indian banks that have claims worth INR37.524 billion (USD451.2 million) verified so far. They include the Bank of Baroda with verified claims of INR17.44 billion (USD210 million), the Central Bank of India with verified claims of INR19.24 billion (USD231.4 million), and the IDBI Bank with verified claims of INR740 million (USD8.9 million). These banks have supported Go First's planned restart and indicated an in-principle willingness to provide loans up to INR4 billion (USD48.1 million) to finance the airline's relaunch and short-term costs. However, so far, funding has yet to be provided as the banks grapple with internal rules governing the provision of loans to distressed entities, and uncertainty remains over the ability of a relaunched Go First to retain any of its aircraft.
Before it ceased flying in early May, twelve lessors had aircraft placed with Go First. All have since advised they want to repossess their aircraft. When applying for voluntary administration, the filings revealed the airline had defaulted on payments to lessors worth INR38.02 billion (USD457.2 million)
