Go First, a subsidiary of the Wadia Group, which filed for bankruptcy on Tuesday, owes its financial creditors a total of ₹5600 crores.
The airline stated that 'As of April 30, Go First Air had not defaulted on any of these dues. However, considering the present financial situation of the corporate applicant, defaults to financial creditors would be imminent.'
The Directorate General of Civil Aviation (DGCA) has taken note of Go First's financial situation and issued a show-cause notice to address the matter.
Multiple banks, including Central Bank of India, Bank of Baroda, Axis Bank, IDBI Bank, and Deutsche Bank, have extended loans to Go First and now face potential consequences due to the airline's financial difficulties. As reported by CNBC-TV18, the exposure amounts are as follows:
- Central Bank of India: ₹1561.6 crore
- Bank of Baroda: ₹1429.82 crore
- Axis Bank: ₹30 crore
- IDBI Bank: ₹58.58 crore
- Deutsche Bank: ₹1320 crore
The outlook for the airline remains negative, with rating agencies predicting continued losses in the near future, potentially necessitating external borrowing or support from the Wadia Group.
Go First has experienced net losses in FY20, FY21, FY22, and H1FY23, further exacerbating its financial troubles. These challenges could directly impact the airline's business risk profile and potentially lead to a loss of market share.