Grounded GoFirst Drives Bombay Burmah Shares Tumbled 5%

Bombay Burmah shares fell more than 6% as group company GoFirst pursued debt resolution proceedings.

On May 3, Wadia Group company Bombay Burmah Trading Corporation shares fell 4.72% to Rs 991.65 in early trade after GoFirst filed for voluntary insolvency resolution. The fall caps a 36% rise in the stock from March 28 to May 1.

On May 2, Bombay Burmah Trading Corporation said it holds a 32.61% equity stake in the budget carrier.

GoFirst’s insolvency filing effect on the financial statements for March 31, 2023, would be assessed and reported in due course, the filing said.

Bombay Dyeing fell 1.69% to Rs 90.15, National Peroxide 0.81% to Rs 1,382, while Britannia Industries traded down at Rs 4,530 in early trade.

Bombay Burmah, with its subsidiary Baymanco Investments infused around Rs 210 crore into cash-strapped GoFirst in the December quarter, issuing compulsory convertible preference shares (CCPS). It will convert into equity shares post five years from the date of allotment.

In 2021, Wadia Group had infused around Rs 2,000 crore into GoFirst in equity and bridge loans amid a planned IPO.

On May 2, GoFirst filed an application for voluntary insolvency resolution procedures before the National Company Law Tribunal (NCLT) in Delhi.

The company said that the flights would be restarted once the NCLT admits the application, having grounded 28 planes, which is more than half of its fleet, amid a non-supply of engines by Pratt & Whitney (P&W).

According to the Reuters report, GoFirst owes Rs 6,521 crore to lenders like Bank of Baroda, IDBI Bank, Central Bank of India, Axis Bank and Deutsche Bank. Till April 30, GoFirst had not defaulted on any dues, it said in its bankruptcy filing.

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