Go First given another 60-day extension to complete insolvency process
The National Company Law Tribunal (NCLT) has granted another 60-day extension to the struggling airline, Go First, for its insolvency proceedings. This additional period, which spans from April 4 to June 3, was approved today. The decision aims to provide the airline more time to conclude its corporate insolvency resolution process (CIRP). The ruling was influenced by a Supreme Court verdict in the Essar Steel case that allows extensions in extraordinary circumstances.
Resolution plans in final stages despite lessor resistance
Go First's resolution professional cited the final stages of resolution plans as grounds for the extension. This request faced opposition from lessors, but the NCLT agreed and approved the extension. According to the Insolvency and Bankruptcy Code (IBC), if a resolution professional seeks an extension of up to 60 days, the NCLT has discretion to prolong the process beyond its standard 330-day limit if deemed necessary.
Committee of Creditors backs extension request
The committee of creditors (CoC), including Central Bank of India, Bank of Baroda, and IDBI Bank Ltd, unanimously supported the extension request at a meeting on March 29. The tribunal has instructed the resolution professional to complete the process within this extended timeframe. However, it is unlikely that Go First will receive any further extensions beyond this period.
Go First's insolvency process attracts potential buyers
Despite its financial difficulties, Go First has received all legally required extensions. On November 6, a 90-day extension was granted with a deadline of February 4. However, due to evolving circumstances and interest from potential buyers, an additional 60-day extension was given for the insolvency process. Companies such as Safrik, Spicejet, and Sky One have shown interest in acquiring Go First during these proceedings.
Financial bids received amid Go First's insolvency proceedings
Two financial bids have been received so far: one joint bid by SpiceJet's Ajay Singh and Busy Bee, and another by Sharjah-based Sky One Aviation. Last month, the consortium led by SpiceJet promoter Ajay Singh and Busy Bee Airways upped its bid for Go First from ₹1,600 crore to ₹1,800 crore. The airline, previously supported by the Wadia Group, declared insolvency on May 2, 2023, and ceased flights from May 3. Its total liabilities are estimated to be around ₹11,000 crore.
