GoFirst, the cash-strapped airline owned by the Wadia Group, has received interim finance approval from its creditors, signaling a potential revival of its operations. The airline had requested additional funding of ₹400 crore to ₹600 crore from its lenders, and while in-principle approval has been granted, the plan is subject to the approval of the respective banks’ boards.
The Committee of Creditors (CoC) of GoFirst, led by Resolution Professional Shailendra Ajmera, will convene to discuss the submitted revival plan in the coming days. Ajmera aims to restart operations by July 1, and the airline has approached the lenders for survival capital, promising a swift return to normalcy.
Revival plan
During the CoC meeting, Ajmera presented a flight revival plan encompassing key aspects such as the proposed flight schedule, the required number of aircraft, and anticipated routes. Additionally, the airline has sought further funding from the lenders. The plan outlines the airline’s intention to restart operations with 22 aircraft and 78 daily flights. However, the plan is currently being reviewed by the Directorate General of Civil Aviation (DGCA) for final approval, which hinges on fulfilling certain requirements and resolving discussions with lessors.
The lenders, while exercising caution, expressed their willingness to evaluate the revival plan, considering factors like expected cash flow and funds required for operational expenses, including salaries. However, their final decision is contingent upon receiving the green light from the aviation regulator. The DGCA has sought clarifications from Ajmera regarding specific aspects of the plan, and a response is pending.
GoFirst has temporarily suspended operations until June 25 as it navigates the insolvency process. The airline filed for voluntary insolvency on May 2, and after receiving approval from the National Company Law Tribunal (NCLT), a moratorium was granted on May 10, offering protection from creditors. The insolvency filing revealed a total debt of ₹11,463 crore owed by GoFirst to its creditors.
The appointment of Shailendra Ajmera as the Resolution Professional underscores the airline’s commitment to overseeing the insolvency process and formulating a revival plan. Ajmera’s submitted plan is currently being evaluated by both lenders and the DGCA, with the shared goal of reviving GoFirst as a fully operational airline. Notably, GoFirst has already received ₹200 crore under the Emergency Credit Line Guarantee Scheme (ECLGS), but the ultimate approval of the flight revival plan by the DGCA remains crucial to the lenders’ decision-making process.