The Wadia Group is planning to infuse INR 5100 million into its airline Go First through its Mauritius-based entity Baymanco Investments, reported Business Standard. The cash influx is to meet the airline’s working capital requirements and general corporate purposes. Baymanco Investments will be allotted these CCPS within one year.
Once allotted, the CCPS will be converted into equity shares after five years at the price of INR 75 per equity share, which means that 15 CCPS of the face value of INR 10 each will be converted into two equity shares of INR 10 each.
According to the documents, these funds raised through CCPS will be utilized by the company towards working capital requirements and general corporate purposes.
To accommodate the proposed CCPS issuances, the existing authorized share capital of the company of INR 5000 million (INR 4500 million in equity share capital and INR 500 million in preference share capital) was increased to INR 9600 million (INR 4500 million in equity share capital and INR 5100 million in preference share capital), stated the documents.
In FY 2022-23 Go First took two loans worth INR 2050 million under the Indian government’s Emergency Credit Line Guarantee Scheme to deal with its cash crunch.
In October 2022, Go First said its net loss more than doubled to INR 1,808 million in FY 2021-22 due to supply chain issues and pandemic recovery. The company incurred losses of INR 8705 million and INR1,271 million in 2020-21 and 2019-20, respectively.
Go First has 57 aircraft in its fleet. About 40 per cent of it is currently grounded due to delays in engine supply by Pratt & Whitney.