In a significant development for the bankrupt airline Go First, the National Company Law Tribunal (NCLT) has granted a 60-day extension for its moratorium, extending the timeline for its corporate insolvency resolution process (CIRP). The decision aims to provide the airline with additional time to finalize its resolution process, as it seeks to navigate through the challenges posed by its financial distress.
This extension, stretching from February 4 to April 4, effectively extends Go First’s timeline to 330 days to complete its resolution process, with over 270 days already spent under CIRP. The resolution professional (RP) overseeing Go First’s case informed the court that the airline has received interest from three potential buyers, all of whom have already deposited funds. This prompted the request for more time to seal the deal and move forward with the resolution process.
The unanimous agreement of Go First’s creditors to seek this extension underscores the importance of providing the airline with the necessary breathing space to explore viable options for its revival. Under the provisions of the Insolvency and Bankruptcy Code (IBC), the NCLT has the authority to grant such extensions if deemed necessary, especially when there is tangible progress in the resolution efforts.
It’s worth noting that this extension comes after Go First completed its initial 90-day extension, which expired on February 4. While this extension provides the grounded airline with more time for revival, it presents challenges for aircraft lessors who have been seeking to repossess their planes through various court orders. The extension complicates matters for them, as they navigate through the legal complexities of the insolvency proceedings.
Go First’s bankruptcy, declared in May 2023, stemmed from engine failures attributed to Pratt & Whitney. Since then, the airline has faced numerous hurdles, including disputes with lessors and frequent changes in the NCLT’s hearing schedules. The prolonged legal and administrative battles have kept the airline grounded, exacerbating its financial woes and uncertainty about its future.
Despite these challenges, there is a glimmer of hope on the horizon. Potential buyers, including SpiceJet’s Ajay Singh, Sky One from Sharjah, and the lesser-known Busy Bee, have expressed interest in acquiring Go First and have taken formal steps towards acquisition by submitting the necessary bank guarantees. This signals a positive development for the airline, as it explores options for restructuring and revival under new ownership.
However, the road ahead remains uncertain, and Go First’s future hinges on the successful conclusion of the resolution process. With no clear resolution plan in sight after spending over 270 days in insolvency, the airline faces a critical juncture in its journey towards revival. The coming weeks will be crucial as stakeholders work towards finding a viable path forward for the airline.
The decision to grant the moratorium extension underscores the NCLT’s commitment to facilitating the resolution process and ensuring a fair and transparent outcome for all stakeholders involved. It provides Go First with the necessary time and space to explore potential restructuring options and finalize a resolution plan that safeguards the interests of creditors, employees, and other stakeholders.
As Go First continues to navigate through the complexities of its insolvency proceedings, stakeholders remain hopeful that a favorable resolution will emerge, paving the way for the airline’s revival and eventual return to the skies. The coming months will be pivotal in determining the fate of Go First and shaping the future of the aviation industry in India.
