In a respite for bankrupt airline Go First, the National Company Law Tribunal (NCLT) on Tuesday approved a 60-day extension for its moratorium, aiming to give the airline additional time to finalize its corporate insolvency resolution process (CIRP).
This extension, stretching from February 4 to April 4, 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, prompting the request for more time to seal the deal.
The airline’s creditors have unanimously agreed to seeking this extension, the resolution professional’s legal counsel told the NCLT.
Under the Insolvency and Bankruptcy Code (IBC), if the resolution professional seeks an extension of up to 60 days, the NCLT can allow it to push the process beyond the standard 330-day limit if deemed necessary.
Mint had reported first on 4 February that Go First was likely to get another 60-day extension to complete the insolvency process.
Go First has filed this plea in NCLT for an extension of the corporate insolvency resolution process after completing its initial 90-day extension, which expired on 4 February. While this extension allows the grounded airline more time for revival, it complicates matters for aircraft lessors who have been seeking to repossess their planes through various court orders.
Go First declared bankruptcy in May 2023, blaming it on engine failures from Pratt & Whitney. Since then, the airline has been grounded, entangled in legal and administrative hurdles, including disputes with lessors and frequent changes in the NCLT’s hearing schedules. The last significant hearing took place in November.
Despite this extension, Go First’s future hangs in the balance, with no clear resolution plan in sight after spending over 270 days in the insolvency process. Nevertheless, there is a silver lining as potential buyers, including SpiceJet’s Ajay Singh, Sky One from Sharjah, and the less-known Busy Bee, have shown interest and taken formal steps towards acquisition by submitting the necessary bank guarantees.
An earlier bid from Jindal Power, led by billionaire Naveen Jindal, was withdrawn after evaluating Go First’s financial health.
