GoFirst Air Debt: Wadia Group’s airline GoFirst has canceled its flights till May 5 due to lack of funds. Along with this, NCLT has demanded to declare bankruptcy. Meanwhile, good news has come to the fore for the airline. The three lenders of GoFirst have agreed to reduce the loan.
According to the Economic Times report, Central Bank of India, Bank of Baroda and Deutsche Bank have reduced the loan to provide immediate additional finance, but this loan is open to restructuring and its repayment period is long.
On Tuesday, GoFirst filed a voluntary bankruptcy petition. After this decision, there was a crisis of loan payment to the banks. Bank loans and loan facilities are kept in the standard account. Banks are afraid that if there is bankruptcy, the loan may sink. In such a situation, the banks have reduced the loan and asked to pay it.
How much is the company’s debt
According to ET’s report, the bank has provided a debt facility of Rs 4,500 to 5,000 crore. According to some media reports, the airline has said in its bankruptcy filing that it has a liability of Rs 6,521 crore. The National Company Law Tribunal (NCLT) will give its verdict today i.e. on 4th May.
How much exposure of which bank
Central Bank of India has the largest exposure with Rs 1,987 crore, of which Rs 1,305 crore was loan and Rs 682 crore was provided under the credit guarantee scheme during the pandemic. The bank has made a provision of Rs 1,500 crore for these loans. BoB has an exposure of Rs 1,430 crore and Deutsche Bank has an exposure of Rs 1,320 crore.
Recovery will be a challenge
It will be a challenge for banks and other institutions to recover this loan. IDBI Bank has an exposure of Rs 58 crore while Axis Bank has an exposure of Rs 30 crore. Apart from this, in January, JM Financial Credit Solution had provided a long term loan of Rs 150 crore.
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