Go First Faces $2.9 Billion In Claims from Creditors Amid Ongoing Insolvency Process

Go First has recently received claims worth a staggering $2.9 billion from creditors. The claims come amidst the airline's ongoing insolvency resolution process, Reuters reported.

The procedure complies with Indian law's procedural standards, which give every creditor a right to payment and redress by presenting claims in the event of a company's bankruptcy. After the claims are filed, the resolution specialist must verify their validity.

"Claims from the lenders are around 50 billion rupees, while lessors' claims amount to 180 billion rupees so far," a banker with a state-run bank, who has exposure to Go Airlines said, after a meeting of the committee of creditors on Friday.

Bankers, who requested anonymity as they were not authorized to speak to the media, revealed that Go Airlines, which operated the Go First carrier, filed for bankruptcy protection in May.

The airline attributed the grounding of approximately half of its 54 Airbus A320neos to "faulty" Pratt & Whitney engines. However, Raytheon, the engine maker's owner, has refuted the claims, stating that they are without merit.

Earlier this month, the company initiated a process to attract investor interest by appointing a court-appointed administrator. Potential investors were invited to express their interest in the company, and the deadline to submit their expressions of interest (EoI) is set for August 9.

"The airline has received 40 queries on EOIs from potential bidders, but no formal submissions have been made as yet," the second banker said.

Go Airlines could resume operations, according to India's aviation regulator, if it can fulfil a number of requirements, including obtaining temporary funds and receiving clearance for its flight schedule.

The banker stated that the resolution professional is waiting for banks to release monies for which in-principle approval was granted last month in order to commence activities.