Go First Owes Rs 65.21 Bn To Financial Creditors

Low cost Indian airlines, Go First owes Rs 65.21 billion ($ 798 million) to financial creditors. It was seen in the company's voluntary insolvency filing report on Tuesday.

To get it back they have started taking actions against the company to ground, repossess aircrafts. Although Go First has not defaulted on paying its financial creditors till April 30, however considering the present situation, default to financial creditors 'would be imminent' reported Reuters.

For the last three and half years ( FY20, FY21, FY22, and H1FY23) the airlines has been incurring net losses. The financial troubles of the company may impact its business risk profile, resulting in a loss of market share as per a Reuters report,

The lenders to Go First include Central Bank of India, Bank of Baroda, Axis Bank, IDBI Bank, and Deutsche Bank. The airline's financial difficulties may impact the lenders' ability to recover their loans.

The airline's total liabilities to all creditors stand at ₹114.63 billion which includes dues to banks, financial institutions, vendors and aircraft lessors.

"Currently, the assets of the company are not sufficient to meet its liabilities," the airline said in the filing, reported Reuters.

The company has defaulted on payments to operational creditors, including Rs 12.02 billion to vendors and Rs 26.60 billion to aircraft lessors.

It has received notices from lessors for termination of aircraft lease agreements and some have started actions against the company to ground or repossess aircraft, the filing said.

Six lessors have also invoked letters of credit issued to them by lenders, it said.