The Committee of Creditors (CoC) of GoFirst, the airline owned by the Wadia Group, is scheduled to hold a meeting on Wednesday at 3 PM to discuss the ongoing insolvency proceedings. Here’s a summary of the current situation and what can be expected from the meeting.
Story so far
After suspending its operations on May 2, GoFirst filed for voluntary insolvency and received approval from the National Company Law Tribunal (NCLT). As a result, a moratorium was granted on May 10, providing the airline with protection from its creditors. According to GoFirst’s insolvency filing, it owes a total of ₹11,463 crore to its creditors.
To oversee the insolvency process, the airline has appointed Shailendra Ajmera as the Resolution Professional (RP). Ajmera has been entrusted with the task of formulating a revival plan, which has been submitted to the Directorate General of Civil Aviation (DGCA) for review.
Here’s what is expected
During today’s CoC meeting, the RP is expected to present the flight revival plan to the lenders. The presentation will cover various aspects, including the proposed flight plan, the number of aircraft required, and the anticipated routes.
This plan will be evaluated by the lenders based on factors such as expected cash flow and funds needed for operational expenses, including salaries. However, sources indicate that lenders are currently exercising caution and are unlikely to provide additional funding.
₹200 crore has already been disbursed to GoFirst under the Emergency Credit Line Guarantee Scheme (ECLGS). However, the DGCA’s approval of the flight revival plan remains a crucial factor in the lenders’ decision-making process.
However, the lenders have expressed their intention to approve the plan only after receiving the green light from the aviation regulator. At present, the DGCA has sought clarifications from the RP regarding certain aspects of the plan, and Ajmera is yet to respond to these queries.
Overall, both the lenders and the DGCA are keen on reviving GoFirst as an operational airline. The CoC meeting aims to evaluate the revival plan, taking into account the financial requirements and the regulatory approval necessary to facilitate the airline’s comeback. The outcome of this meeting will play a significant role in determining the future of GoFirst and its ability to resume operations successfully.