Go First lenders grant in-principle nod for Rs 425 crore interim financing to fly again

However, the final approval from the banks is contingent upon the Directorate General of Civil Aviation (DGCA) granting permission for Go First to restart its operations, banking executives who didn’t wished to be identified told CNBC-TV18.

“We will seek individual board approval for financing only once there is assurance from DGCA about restarting Go First operations. As of now, this is only in-principle approval which IRP (insolvency resolution professional) had sought,” said one of the bankers to the airline. This move underscores the cautious approach taken by the lenders, ensuring that the airline has the necessary regulatory clearance before disbursing funds.

Go First, formerly known as GoAir, has been grappling with financial difficulties, which led to its admission into the Insolvency and Bankruptcy Code (IBC) on May 10. The airline has outstanding debts amounting to Rs 6,521 crore, owed to various banks including Central Bank of India, Bank of Baroda, Deutsche Bank, and IDBI Bank.

Go First, one of the major players in the Indian aviation industry, has faced stiff competition and market challenges in recent years. The cash-strapped airline filed for bankruptcy, blaming ‘faulty’ Pratt & Whitney engines which led to the grounding of half its fleet, and revenue hit.

As part of the ongoing financial restructuring efforts, Go First has cancelled all its flights until June 28, as of now. This temporary halt in operations is aimed at minimising costs and conserving resources while the airline works towards resolving its financial woes.