Bank of Baroda recovers ₹301 crore from Go First under ECLGS

The government’s National Credit Guarantee Trustee Co Ltd has released ₹301 crore to Bank of Baroda (BoB) as part of its claim from loans given to the defunct Go First Airlines under the Emergency Credit Line Guarantee Scheme (ECLGS), marking the first recovery for any lender from the bankrupt airline, said three people privy to the information.The recovery comes even as lenders have put to vote a plan to liquidate the airline after negotiations with the two prospective bidders did not make any headway.

BoB, one of the three financial creditors to the airline, had lent close to ₹550 crore under the post-Covid-19 scheme, through which the government guaranteed loans to certain sectors and micro, small and medium enterprises to help them tide over any liquidity crisis caused by the pandemic.

BoB had filed to invoke the government guarantee earlier this year, after the initiation of bankruptcy proceedings in May last year.

“The money was received at the end of last month, and one can say it is the first recovery for any creditor from the airline. A part of the claims was released and there is some more that is expected to come after due process is followed,” said one of the persons, who did not wish to be identified.

BoB did not reply to ET’s emailed queries till press time.

The airline owes BoB ₹1,744 crore, including loans guaranteed under the ECLGS. The approval of the guarantee to the bank also opens the doors for the two other lenders, Central Bank of India and IDBI Bank, to recover their claims through a similar process.

“Both Central Bank and IDBI have also started the process to file claims and recover their dues from the government guarantee. BoB’s success will make it easier for them also to claim their dues,” said a second person aware of the details.

The airline has been grounded for more than a year due to the lack of a revival plan.