The National Company Law Tribunal (NCLT) has granted approval for a 90-day extension to finalize the insolvency proceedings of Go First. The resolution professional’s appeal for an extension until February 4, 2024, was accepted by the tribunal on Thursday.
The Committee of Creditors, consisting of Central Bank of India, Bank of Baroda, and IDBI Bank, passed a resolution on October 17 to extend the resolution process by an additional 90 days. The initial six-month period concluded on November 6.
As of now, the resolution professional has not secured a bidder for the troubled airline, which voluntarily applied for insolvency under Section 10 of the Insolvency and Bankruptcy Code, 2016, in May.
Jindal Power Ltd, the sole company whose expression of interest was accepted by creditors, did not submit a bid for the insolvent airline until November 21, the deadline for bid submissions.
The counsel representing the resolution professional informed the tribunal that no plan has been received yet, and the Committee of Creditors is considering the next steps, including the issuance of a revised Form G for the extension of the bid submission period. The counsel for engine lessor SMBC Afro Engine Lease BV argued against the extension without a clear plan of action.
However, the tribunal noted that the engine lessor had no standing in the matter, emphasizing the importance of completing the Corporate Insolvency Resolution Process (CIRP) before considering liquidation.
Shailendra Ajmera, the resolution professional, was appointed by the tribunal in June, replacing the interim resolution professional Abhilash Lal.
Go First has been entangled in legal disputes with engine and aircraft lessors regarding maintenance and asset return. The airline’s insolvency prompted a change in the law, with the government exempting aircraft and aircraft engines from the mandatory moratorium on assets under the IBC, 2016, in October. The application of this exemption to Go First lessors is yet to be determined by the courts.
The airline is also facing allegations in two petitions claiming that the voluntary insolvency filing by the Wadia Group-owned airline was “malicious” and “not in good faith.” Logistics provider Delhivery filed a case in June, asserting that the airline accepted Rs 57 lakh as advance payments on the day it filed for voluntary insolvency.
As of May 10, Go First had defaulted Rs 2,660 crore towards aircraft lessors and Rs 1,202 crore towards vendors. The airline owes an additional Rs 6,521 crore to six financial creditors, including Central Bank of India, Bank of Baroda, and IDBI Bank.
NCLT is scheduled to hear a series of cases from aircraft and engine lessors on December 1.
