NCLT admits Go First‘s insolvency plea
NEW DELHI: The Delhi bench of National Company Law Tribunal (NCLT) on Wednesday admitted Go Airlines India ltd’s (Go First) plea for voluntary insolvency and for initiation of Corporate Insolvency Resolution Process (CIRP) proceedings.
NCLT has granted Go First protection under moratorium from recovery by lessors and lenders. The NCLT has appointed Abhilash Lal, backed by Alvarez and Marsel, as the interim resolution professional (IRP) to run the airline.
The tribunal directed the company's suspended board of directors to cooperate with Lal and to ensure there are no layoffs. The management was also asked to deposit ₹5 crores with the IRP to meet immediate expenses.
Go First CEO Kaushik Khona called NCLT's order a historic judgment in terms of pace of proceedings. He added that it will ensure that the airline remains viable as the airline still have 27 aircraft in operation.
The moratorium order of NCLT, according to Khona, will prevent lessors from taking back aircraft.
Go First has now announced that its flights will remained cancelled till May 19 “due to operational reasons.”
The low-cost carrier had filed for voluntary insolvency proceedings last week, blaming faulty Pratt & Whitney engines for the grounding of about half its 54 Airbus A320neo planes.
The order is favourable for the Wadia family-promoted airline as aircraft lessors are seeking to take back their planes. According to the latest figures, various lessors have reached out to aviation regulator DGCA for the deregistration of 42 planes.
Go First owes financial creditors Rs 6,521 crore. The filing lists Central Bank of India Ltd, Bank of Baroda Ltd, IDBI Bank Ltd, Axis Bank Ltd and Deutsche Bank among Go First's financial creditors.
Go First claims that its promoters have infused Rs 3,200 crores in the last three years, Rs 2400 crores of which were injected in the last 24 months, and Rs 290 crores in April 2023 alone. This brings the total promoter investment in the airline since its inception to approximately Rs 6,500 crores.
The grounding of close to 50% of its A320neo fleet has led to Rs 10,800 crores in lost revenues and additional expenses for the airline, said the airline.