Go First Airlines' creditors unanimously approve fresh proposals for a takeover, signaling renewed prospects after a month-long void in submissions
Go First Airlines' creditors have collectively approved the consideration of fresh proposals from potential resolution applicants (RAs) to take over the non-operational airline. This decision follows a period of over a month during which no submissions were received, concluding the initial process in November.
The airline has garnered interest from five entities, of which Sharjah-based aviation company Sky One, Africa-focused Safrik Investments, and budget airline SpiceJet submitted expressions of interest (EoIs) last month, as per a report by the Economic Times.
Following this, two more entities, namely, NS Aviation based in the US and Plan IT, a consortium of individuals, have expressed interest in submitting proposals, as per sources cited in the report. SpiceJet is regarded as a strong competitor among the new applicants owing to its status as a domestic carrier.
Go First Airlines has outstanding debts exceeding Rs 6,200 crore, with secured creditors including Central Bank of India, Bank of Baroda, and IDBI Bank holding admitted claims of Rs 1,934 crore, Rs 1,744 crore, and Rs 75 crore, respectively.
Extending the corporate insolvency resolution process (CIRP) by another 60 days is a possibility for the Resolution Professional (RP), allowing compliance with the insolvency code's outer deadline of 330 days after the current timeline concludes on February 4. Despite this extension option, lenders remain doubtful about receiving robust bids, considering the airline's ongoing struggles for over nine months, marked by conflicts with aircraft lessors and a legal dispute with engine manufacturer Pratt & Whitney.
Seeking deregistration of planes, airplane lessors have taken Go First to the Delhi High Court, arguing that the leases were terminated prior to the May 10 moratorium declaration. The court is yet to deliver its verdict. The Directorate General of Civil Aviation (DGCA) has affirmed in an affidavit that the recent order exempting aviation leases from the bankruptcy moratorium should extend to companies undergoing insolvency proceedings.