Wadia Group’s GoFirst Airlines is facing financial crisis. Meanwhile, the connection of a loan of Rs 1320 crore raised from a German lender has come to the fore. Go First had taken a loan of $ 300 billion (Rs 1320 crore) from Germany’s lender (Deutsche Bank) during the financial years 2021 and 2022. During the same period, the company created FDs worth $190 billion. Which was used to secure finance for Go First from the German lender.
Leela Lands, a Wadia Group company, said it had taken a loan from Deutsche Bank, but clarified that it had nothing to do with the stake in Britannia Industries. FDs were created from its deposited cash earnings.
Leela Lands Limited Mauritius (LLL) provided cover to Deutsche Bank out of its cash proceeds to finance advance finance to GoAir through a $191 billion FD. A $300 billion loan has been provided by DB to LLL Group for use in corporate purposes and investments.
GoFirst said it had received a finance facility of Rs 1,320 crore from Deutsche Bank India, but declined to share details of the FDs created by Leela Lands. We are not aware of any such arrangement. We have no relation with Britannia Industries.
It is difficult to estimate the risk of Wadia Group
According to sources, Leela Lands had taken a loan from Deutsche Bank in the financial years 2021 and 2022. It is difficult to estimate the total exposure of the Wadia Group to Deutsche Bank as the finance facilities are provided through more than one group company and in different jurisdictions.
A bankruptcy proceeding is determined by the principal creditors of a company. Once the committee of creditors is formed, Deutsche Bank’s exposure may affect it in the bankruptcy proceedings.
NCLT accepted the application of Go First
Explain that the National Company Law Tribunal on Wednesday accepted GoFirst for bankruptcy after the company voluntarily approached the adjudicating authority that it was unable to meet its financial obligations to creditors.
GoFirst has said in its application that it has defaulted in payment of Rs 2,600 crore to aircraft leisure and Rs 1,200 crore to vendors. It filed for bankruptcy after several of its planes were grounded due to faulty engines supplied by Pratt & Whitney.