India's Go First lenders to not release more funding to grounded airline - sources

Central Bank of India

06/11/2023 15:41

By Siddhi Nayak
       MUMBAI, Nov 6 (Reuters) - Lenders to India's Go First
are not in favour of releasing additional funding to the
grounded airline, given its legal troubles with lessors and
complexities related to changes in the bankruptcy law, two
banking sources told Reuters on Monday.
    Go First's lenders, which include the Central Bank of India
 CBI.NS , Bank of Baroda  BOB.NS , IDBI Bank  IDBI.NS  and
Deutsche Bank  DBKGn.DE , had in-principally approved funding of
4.50 billion rupees ($54.09 million) in June to resume
operations and restart the airline.
    "When the funding was approved, there was some visibility
about the airline restarting operations," the banker said. 
    "Now the situation is quite different and the future is
bleak," said a banker with a state-run bank that has exposure to
Go First.
    None of the sources wished to be identified because they
were not authorized to speak to the media.
    The Committee of Creditors (CoC) of Go First met earlier in
the day, the sources said.
    Go First filed for bankruptcy in May but its lessors were
blocked from repossessing planes due to a moratorium imposed by
Indian courts.
    India, however, last month amended its insolvency law,
potentially paving the way for lessors to take back their
planes.
    The country's aviation regulator, in a court filing, earlier
this month said that the law would be applicable
retrospectively, which lenders are looking to contest.
    "If Jindal Power does not submit a bid, bankers will
initiate discussions about liquidation," the banker said,
commenting on an expression of interest Go First received from
Jindal Power Ltd on Oct. 12. 
    The last day to submit bids is Nov. 21, both the sources
said, adding that lenders will be seeking a procedural 90-day
extension to complete the airline's resolution process.

($1 = 83.1990 Indian rupees)

 (Reporting by Siddhi Nayak; Editing by Shweta Agarwal)
 ((Siddhi.Nayak@thomsonreuters.com; +91 22 6921 7848; Reuters
Messaging: Twitter: https://twitter.com/siddhiVnayak))