Go First that filed for voluntary insolvency proceedings reportedly owes $798 million to financial creditors. In a recent filing the airline claimed that it had not defaulted on any of these dues till April 30, but defaults to financial creditors in the future are imminent.
As per the filing, Central Bank of India, Bank of Baroda, IDBI Bank, Axis Bank and Deutsche Bank are the airline’s financial creditors. They are now likely to meet soon and take stock of the situation.
GO First’s total liabilities to all creditors, including banks, financial institutions, vendors and aircraft lessors, is $1.3 billion. As per the filing, the assets of the company are not sufficient to meet the liabilities.
However previously Go First has been found to default on payments to operational creditors including $146 million to vendors and $318 million to aircraft lessors. As per the filing, it has received notices from lessors for termination of aircraft lease agreements, and some have even initiated action against the airline to ground or repossess aircraft. Six lessors have also invoked letters of credit issued to them by lenders, it said.
Go First’s financial woes began with the non-supply of engines by Pratt & Whitney, which led to the grounding of 28 of its planes. It is now looking for investors to resume domestic operations. Responding to Go First’s accusations Pratt & Whitney said that Go First has a long history of missing payments.
Going ahead the engine manufacturer also claimed that it will prioritise its delivery schedules for all its customers in compliance with a March 2023 arbitration related to the airline
“Pratt & Whitney is committed to the success of our airline customers, and we continue to prioritize delivery schedules for all customers. Pratt & Whitney is complying with the March 2023 arbitration ruling related to Go First. As this is now a matter of litigation, we will not comment further,” Pratt & Whitney said in a statement.