NCLT grants Go First final 60-day extension for insolvency resolution
What's the story
The National Company Law Tribunal (NCLT) has granted a final 60-day extension to Go First, the financially troubled airline, to conclude its corporate insolvency resolution process (CIRP). This extension, which lasts until August 3, comes amid challenges and legal implications stemming from a Delhi High Court ruling that deregistered all leased aircraft held by the airline.
why-does-it-matter
Why does this story matter?
The airline filed for insolvency on May 2, 2023, citing financial distress due to faulty engines supplied by Pratt & Whitney (P&W). The airline's total liabilities to creditors amount to nearly ₹11,463 crore, including dues to banks, financial institutions, vendors, and aircraft lessors. The Delhi High Court's April order significantly impacted the airline, ordering the deregistration of all 54 leased aircraft, thus stalling any immediate revival prospects.
Tribunal's warning
NCLT emphasizes adherence to deadline in Go First case
The NCLT has warned that it will not grant any further extensions beyond August 3. The tribunal's stance reflects the urgency to resolve the insolvency process, which has been complicated by legal judgments and evolving bidder interests. Go First is engaged in a legal battle with P&W at the Singapore Court of Arbitration. The airline is seeking about ₹8,000 crore compensation. Last month, Nishant Pitti, the CEO of EaseMyTrip, announced the withdrawal of his firm's bid for Go First.
Legal challenges
Go First's insolvency resolution process faces legal hurdles
The airline's insolvency resolution process has been further complicated by a Delhi high court ruling that deregistered all leased aircraft held by the airline. The ruling, which came in April, has significantly impacted the airline's operations and future prospects. The tribunal's decision to grant a final extension underscores the need for a swift resolution to these legal challenges and bidder interests.