Debt-heavy GoFirst gets ₹2,000 crore from promoter Wadia Group

Forum Gandhi Mumbai | Updated on September 14, 2021

Airline likely to go public in October or November

Gets tenure of its working capital loan renewed

In a move that will help the debt-laden airline, IPO-bound GoFirst (formerly GoAir) has received ₹2,000 crore from its promoters, the Wadia Group.

It has also got the tenure of its working capital loan of ₹2,835.00 crore renewed by the consortium led by Central Bank of India, with an additional loan of ₹300 crore to tide over the Covid-19 crisis.

The airline is likely to go public in October or November.

Pre-IPO placement

Speaking to BusinessLine, a top-placed source said that as its pre-IPO placement, the Wadia Group had assured equity of up to ₹1,500 crore. Along with this, the promoter group had assured infusion of funds to the tune of ₹300 crore in the event of an “exigency” along with debt of another ₹200 crore.

“The Wadias have been infusing funds into the company since March 2020, as a precursor to the IPO. Though it was already that the investment would be to the tune of ₹2,000 crore, the bulk of it has come in this fiscal. These infusions were padding up to support the company during Covid.”

Other capital sources

According to data available on Tofler and documents submitted by the company to the Ministry of Corporate Affairs, the company has also managed to renew its working capital agreement with its consortium led by the Central Bank of India for ₹2,835 crore. This includes a fresh loan of ₹300 crore.

Also see: Jet Airways set to resume domestic operations in first quarter of calendar year 2022

“GoAir has had this loan for over a decade now, and it has never defaulted despite difficult times. Hence, it managed to get another loan,” the sources said.

Sources say that IDBI was now added to the consortium.

However, this could not be confirmed immediately. An email query sent to GoFirst remained unanswered.

The low-cost carrier also managed to get ₹25 crore under the Emergency Credit Guarantee Line Scheme by the Finance Ministry which includes the aviation industry.

Sources say that the final prospectus is likely to be filed by the end of the month or early next month. Depending on the suggestions of investment bankers, the GoFirst IPO may hit the markets by October-end or in the first week of November. The airline plans to raise over ₹3,600 crore through the listing.

Published on September 14, 2021

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