Go First Crisis: The Wadia Group may seek a waiver of the IBC rule as it bars promoters from bidding for their own companies
Go First crisis that has sent shockwaves across the industry may have taken a new turn. As per reports, the Wadia Group, owner of Go First airlines is likely to seek a waiver from the Insolvency and Bankruptcy Code (IBC) rules in order to bid for Go First.
According to a report in The Economic Times, the Wadia Group may seek a waiver of this rule as it bars promoters from bidding for their own companies. This is because Go First’s account with banks is still marked as standard.
The report explains that defaulters are prevented from submitting a resolution plan for an insolvent company (Go First in this case) under the IBC’s section 29A. This also applies if the company has been in default to banks for more than 12 months and the account getting classified as a non-performing asset (NPA).
“Go First accounts are not NPA. These are still standard accounts with the consortium banks. Technically they can submit a resolution plan,” the Economic Times quoted a banker with outstanding loans as saying.
Further, another source told the publication that Go First is meeting operational creditors such as vendors, lessors and travel agents to discuss the future of the business. Even the senior management of Go First has reportedly said that the carrier may withdraw the voluntary insolvency petition if people are willing to take a haircut.
“The promoters first approached the equity market, then the debt market and now this is the final attempt so that the creditors take a haircut, which reduces the debt of the airline. The group wants to be in airline business,” another source told the publication.