GoFirst has sought additional funding of ₹400 crore to ₹600 crore from the lenders. The Committee of Creditors (CoC) of GoFirst, the airline owned by the Wadia Group, will discuss the revival plan submitted by the airline’s Resolution Professional (RP) Shailendra Ajmera in two days.
Meanwhile, the RP has told the bankers that the airline plans to restart operations by July 1.
During the CoC meeting, GoFirst’s RP submitted the revival plan to the lenders. The presentation covered various aspects, including the proposed flight plan, the number of aircraft required, and the anticipated routes. Not only that, the airline has also sought additional funding from the lenders.
According to a top banking official, the airline’s RP said that the airline plans to restart operations with 22 aircraft and 78 daily flights. The banker said that the DGCA is still vetting the plan, and will approve it when all the pieces are in place. The person said that during the meeting, which was only attended by the lenders, the RP expressed the airline’s willingness to restart operations from July 1. However, the person said that it depends on multiple factors including conversations with the lessors.
Meanwhile, the airline has further suspended operations till June 25.
On revival path
The lenders sought information on the airline’s cash flow position, and asked questions on the current position of the aircraft. This plan will be evaluated by the lenders based on factors such as expected cash flow and funds needed for operational expenses, including salaries. However, sources indicate that lenders are currently exercising caution; however, they are willing to evaluate the plan and look for a possible solution to revive the airline.
The lenders have expressed their intention to approve the plan only after receiving the green light from the aviation regulator. At present, the DGCA has sought clarifications from the RP regarding certain aspects of the plan, and Ajmera is yet to respond to these queries.
Overall, both the lenders and the DGCA are keen on reviving GoFirst as an operational airline. The CoC meeting aims to evaluate the revival plan, taking into account the financial requirements and the regulatory approval necessary to facilitate the airline’s comeback.
It is worth noting that an amount of ₹200 crore has already been disbursed to GoFirst under the Emergency Credit Line Guarantee Scheme (ECLGS). However, the DGCA’s approval remains a crucial factor in the lenders’ decision-making process.
After suspending its operations on May 2, GoFirst filed for voluntary insolvency and received approval from the National Company Law Tribunal (NCLT). As a result, a moratorium was granted on May 10, providing the airline with protection from its creditors. According to GoFirst’s insolvency filing, it owes a total of ₹11,463 crore to its creditors.
To oversee the insolvency process, the airline has appointed Shailendra Ajmera as the Resolution Professional (RP). Ajmera has been entrusted with the task of formulating a revival plan, which has been submitted to the Directorate General of Civil Aviation (DGCA) for review.