Aviation News

Bombay Burmah takes yet another blow on its investments in Go Air, ET Infra


Bombay Burmah Trading Corporation (BBTC), the holding-cum-operating company of the Wadia Group, has taken yanother blow on its investments in Go Airlines India.

After the airline was admitted for corporate insolvency, BBTC has taken an impairment of ₹1,920 crore, a report by India Ratings dated September 8 said.

The stock exchange listed BBTC has a 33% stake in Go Airlines.

The rating company’s impairment amount comprises ₹1,870 crore in FY23 and ₹50.2 crore in the first quarter of FY24.

India Ratings has stated that impairment during FY23 for Go Air was ₹223.8 crore on inter-corporate deposits and investments.

The remaining (₹1,646 crore) is “provision for the encashment of pledged fixed deposits (FDs) and stand by letter of credit (SBLC) invocation,” it said.

The impairment was taken on the books of its foreign subsidiary Leila Lands Limited (LLL), Mauritius, which provided a cash collateral of up to $470 million (FY22: $514 million) as security by way of a fixed deposit for banking facilities to GoAir and BDMCL for meeting its fund requirements, the rating report stated.

The ₹50.2 crore provision made in first quarter of FY24 is ‘in lieu of interest and other receivables from GoAir.’

The rating agency also downgraded the debt facilities of BBTC by IND A+.

The Wadia Group had entered an out-of-court settlement with Deutsche Bank (DB), one of its Go Air lender, as first reported by ET on August 14. The German bank invoked the FDs that were pledged with them to settle their dues, as reported. DB India had filed ₹855 crore claims while DB International Asia filed ₹510 crore claims.

  • Published On Sep 13, 2023 at 08:44 AM IST

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