Go First lenders in India would not provide extra money to the airline that is grounded

 Go First lenders in India would not provide extra money to the airline that is grounded

The Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank are among Go First's lenders. In June, they gave their preliminary approval for funds totaling 4.50 billion rupees ($54.09 million) so that the airline may start up again.

Given its legal issues with lessors and the intricacies surrounding amendments to the bankruptcy legislation, lenders to India's Go First are opposed to provide further finance to the grounded airline, two financial sources told Reuters on Monday.

The Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank are among Go First's lenders. In June, they gave their preliminary approval for funds totaling 4.50 billion rupees ($54.09 million) so that the airline may start up again.

"When the funding was authorized, there was some visibility concerning the airline restarting operations," said the lender.

"Now things are very different and it looks bad for the future," a banker affiliated with a state-run bank that deals with Go First said.

Since none of the sources had permission to communicate with the media, none of them wanted to be named.

According to the sources, Go First's Committee of Creditors (CoC) convened earlier in the day.

Go First filed into bankruptcy in May, but an injunction issued by Indian courts prevented its lessors from taking back the aircraft.

However, India changed its bankruptcy legislation this month, which may allow lessors to reclaim their aircraft.

Lenders are attempting to challenge the country's aviation regulator's earlier this month court filing stating that the regulation would apply retroactively.

The banker said, "Bankers will start talks about liquidation if Jindal Generator does not submit a bid," in response to an expression of interest that Go First received from Jindal Power Ltd. on October 12.

According to both sources, bids must be submitted by November 21. They also said that lenders want to request a formal 90-day extension to finish the airline's resolution process.