Go First insolvency case: Resolution profession flags need to raise funds, get business running again
India's fourth largest carrier was granted bankruptcy protection on Wednesday by a tribunal in New Delhi.
Weeks after it filed for insolvency and sought the appointment of a resolution professional, officials have underlined the need for the carrier to raise funds. Meanwhile lenders are reportedly classifying their loans to the company as "non performing" in the current quarter, and one of its aircraft lessors has challenged NCLT order protecting Go First.
The low-cost carrier was granted bankruptcy protection on Wednesday with Abhilash Lal of Alvarez & Marsal being appointed as its interim resolution professional.
"We're working on a very tight schedule, we have to get the business back running... We have to raise the funds to do it," Lal told employees during a virtual townhall meeting, as per a source quoted by news agency Reuters.
The official has been tasked with overseeing the company's affairs and reviving the airline's business within six months.
ALSO READ: Go First: NCLAT to hear plea by airline's lessor SMBC Aviation Capital
Meanwhile, several lessors have raised the alarm after the NCLT gave Go Airlines (India) Ltd bankruptcy protection to allow it to revive itself, but barred them from repossessing planes. SMBC Aviation Capital - the world's second largest aircraft lessor - challenged the order on Thursday.
Two banking sources also told Reuters on Thursday that lenders will be classifying their loans to the company as "non performing" in the current quarter, but are hopeful that the collateral backing the credit would reduce the amount of haircut they have to take. The Indian central bank's rules for handling substandard assets says banks have to provision for at least 15% of total outstanding loans on secured assets in the first 12 months.
(With inputs from agencies)
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First Published:11 May 2023, 05:38 PM IST
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