NEW DELHI: The National Company Law Tribunal (NCLT) on Thursday extended the Corporate Insolvency Resolution Process (CIRP) of the grounded airline Go First by 90 days. The extension, effective from 6 November this year, will end on 4 February, 2024.
The tribunal dismissed the airline’s lessors’ objections against the extension and asked the resolution professional (RP) of the airline to submit a 90-day action plan. It said the resolution plan should be completed within the stipulated time period. The extension comes as a relief for Go First and its stakeholders amid report that billionaire Naveen Jindal-backed Jindal Power Ltd (JLP) has decided not to go ahead with its plan to bid for the airline.
The RP of the airline told the NCLT that there is one prospective bidder for the airline, which could not submit the resolution plan at the end of November 21 deadline. He added that the committee of creditors (CoC) is now reconsidering the next course of action for the airline. The tribunal told the RP that if the insolvency process is not completed within the new timeframe, it may order liquidation proceedings.
Promoted by the Wadia-family, budget carrier Go First stopped flying on May 3, a day after it filed for bankruptcy. A severe financial crisis due to non-supply of engines by Pratt & Whitney (P&W) that led to the grounding of about half of its fleet forced them to take this extreme step, the airline had told.
Experts said Jindal’s decision to back off from buying the grounded airline is a big setback to the creditors who were hoping for a recovery of their dues. The recent amendment to insolvency rules which allows aircraft lessors to take back planes has significantly reduced Go First’s equity value.
Earlier this month, the RP of Go First told the NCLT that Rs 28,558 crore of claims has been received by the creditors. Of this amount, 19% of the claims have been admitted so far. The Central Bank of India, Bank of Baroda, IDBI Bank and Deutsche Bank are among the top creditors to the airline.