BoB expects Go First default, makes Rs 500-cr provision

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Bank of Baroda has made provision of Rs 500 crore for exposure to Go First, which has sought bankruptcy protection from the NCLT. The Mumbai-based public sector lender has an exposure of Rs 1,300 crore to the troubled airline. This does not include exposure that is guaranteed by the Centre under the Emergency Credit Line Guarantee Scheme.

Majority exposure covered Out of this exposure, about Rs 1,000 crore has collateral of tangible securities and corporate guarantees. In Q4, the bank has gone ahead to make provision of Rs 500 crore for this account.

Meanwhile, in what could be a double whammy for Wadia Group after Go First filed for voluntary insolvency, CARE Ratings has raised concerns over Bombay Dyeing’s ability to service its debt during fiscal years 2024 and 2025.

CARE Ratings believes repayments in FY24 are tightly matched with expected cash flows and available liquidity whereas FY25 repayments need to be refinanced if the company is not able to raise funds through rights issue and asset monetisation.

Jet running out of time

Meanwhile, Jet Airways,  which is already grounded, will face a litmus test on May 19. It will be an important day for the Jalan Kalrock Consortium (JKC), which was the winning bidder for Jet Airways. That’s the last day when the air operator’s permit issued by the Directorate General of Civil Aviation expires. The AOP essentially allows an airline to start commercial operations. However, as per sources, Jet has not placed any request for renewal of the AOP, even though any such request is usually done at least a month prior to the expiry date of the licence. This essentially means that more than 30 months after being declared the winning bidder, JKC’s plan to run Jet is as good as buried.