Go Airlines, amidst its ongoing insolvency proceedings, has received claims totaling Rs 24,000 crore ($2.9 billion) from both operational and financial creditors, as disclosed by two banking sources to Reuters. This claim submission process is in accordance with the procedural requirements of the law, granting each creditor the right to seek payment and remedy when a company undergoes bankruptcy. The resolution professional is responsible for verifying the authenticity of these claims.
According to a banker associated with a state-run bank, lenders have filed claims amounting to approximately Rs 5,000 crore, while lessors’ claims have reached Rs 18,000 crore. The identities of the bankers remain undisclosed as they are not authorized to speak to the media.
Go Airlines’ resolution professional is currently in the process of verifying the veracity of the submitted claims and has not yet responded to Reuters’ request for comment.
The airline, operating under the name Go First, filed for bankruptcy protection in May, citing “faulty” Pratt & Whitney engines as the reason behind grounding about half of its 54 Airbus A320neos. However, the engine manufacturer, Raytheon, has discredited these claims, deeming them to be without merit.
To explore potential investor interest, the company invited expressions of interest (EoI) through a court-appointed administrator earlier this month. The deadline for submitting EoIs is August 9. Reportedly, the airline has received 40 queries from potential bidders, but no formal submissions have been made as of yet, according to the second banker.
In a positive development, the Directorate General of Civil Aviation (DGCA) stated that Go Airlines could resume operations if certain conditions are met, including obtaining interim funding and approval of its flight schedule.
The resolution professional awaits the disbursement of funds from banks, following the in-principal approval given last month to support the airline’s resumption of operations.
(With inputs from Reuters)