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Informist, Tuesday, Sep 3, 2024

 

--Go First resolution officer moves NCLT to seek airline's liquidation 

--NCLT notice to Go First's suspended management on liquidation plea 

--NCLT to next hear Go First insolvency case on Oct 4 

 

NEW DELHI – The Delhi bench of the National Company Law Tribunal today issued a notice to the suspended management of the debt-ridden Go First on a plea by its resolution professional seeking liquidation of the airline. The tribunal will hear the case next on Oct 4.

 

The counsel for the resolution professional told the tribunal that the committee of creditors of the airline passed a resolution seeking its liquidation as the plans received by them appeared to be non-compliant. Further, the resolution professional sought the tribunal's approval for third party funding for the airline to defend its arbitration case with US-based aerospace manufacturer Pratt & Whitney. The resolution professional said the airline has claims of more than $1 bln from Pratt & Whitney.  

 

Earlier, the lenders of the airline had appointed a US-based litigation finance firm Burford Capital to bankroll the arbitration case against Pratt & Whitney, according to a report in The Economic Times last month. The lenders had approved the arrangement, wherein Burford would pay $20 mln in the first tranche for the airline's arbitration case.

 

Go First had filed for voluntary insolvency in the face of a financial crunch due to non-supply of engines by Pratt & Whitney, which forced the airline to ground 28 of its 56 aircraft. Go First owes more than 65 bln rupees to its lenders, where secured creditors Central Bank of India, Bank of Baroda and IDBI Bank have admitted claims of 19.34 bln rupees, 17.44 bln rupees and 750 mln rupees, respectively. The insolvency petition was admitted by the National Company Law Tribunal on May 10, 2023. 

 

SpiceJet Ltd Chairman and Managing Director Ajay Singh and Busy Bee Airways Pvt Ltd had jointly submitted a bid for Go First. Another bid was from a consortium of Sharjah-based aviation company Sky One FZE and Pramod Sharma. However, the revival process of the airline was derailed after a setback from the Delhi High Court regarding its leased aircraft. In a judgement on Apr 26, the Delhi High Court had asked the Directorate General of Civil Aviation to de-register 54 aircraft leased by Go First to its lessors. 

 

On Jun 12, the tribunal gave a fourth extension to the airline to complete its corporate insolvency resolution process. The tribunal had directed the resolution professional and the airline's committee of creditors to finalise the matter within the extended period and had verbally remarked that there would be no further extension.  End

 

Reported by Surya Tripathi

Edited by Vandana Hingorani

 

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