Go First Airways Owes Financial Creditors $798 Mn, Shows Bankruptcy Filing

Indian airline Go First, which filed for bankruptcy on Tuesday, owes financial creditors Rs 6,521 crore ($798 million), its bankruptcy filing showed.

As of April 30, Go First Air had not defaulted on any of these dues, it said in the filing, which was seen by Reuters.

"However, considering the present financial situation of the corporate applicant, defaults to financial creditors would be imminent," the filing said.

Lenders were not aware of the airline's plans to file for voluntary insolvency and will meet soon to take stock of the situation, said two people familiar with the matter. They spoke on condition of anonymity as they are not allowed to speak to the media.

The filing lists Central Bank of India Ltd, Bank of Baroda Ltd, IDBI Bank Ltd, Axis Bank Ltd and Deutsche Bank among Go First's

financial creditors.

The Central Bank of India and Bank of Baroda have an exposure of Rs 1300 crore, respectively under a consortium loan, while IDBI Bank has a smaller exposure of Rs 50 crore, the filing showed.

An official at Central Bank of India said the bank's total exposure to the airline is Rs 20000 crore. The person spoke on condition of anonymity as they are not allowed to speak to the media.

In the case of Axis Bank, the airline has a letter of sanction of credit, the filing said, without specifying whether this credit has been availed.

Shares of Central Bank of India were down 4.14 per cent as of 9.35 a.m. IST, while those of Bank of Baroda were down 2.4 per cent. IDBI Bank was down 1.4 per cent and Axis Bank dropped 0.5 per cent. The benchmark BSE Sensex was down 0.4 per cent.

Deutsche Bank declined to comment. Emails sent to the other banks were not immediately answered.

Go First has also borrowed Rs 1,292 crore under the government's emergency credit scheme introduced during the Covid crisis. As part of the scheme, the government guarantees loans given out by banks to the company.

The airline's total liabilities to all creditors stand at Rs 11,463 crore, the filing shows. This includes dues to banks, financial institutions, vendors and aircraft lessors.

"Currently, the assets of the company are not sufficient to meet its liabilities," the airline said in the filing.

The company has defaulted on payments to operational creditors, including Rs 1,202 crore to vendors and Rs 2,660 crore to aircraft lessors.

It has received notices from lessors for termination of aircraft lease agreements and some have started actions against the company to ground or repossess aircraft, the filing said.

Six lessors have also invoked letters of credit issued to them by lenders, it said.

(Reporting by Arpan Chaturvedi in New DelhiAdditional reporting by Siddhi Nayak in MumbaiWriting by Ira DugalEditing by Mark Potter)

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