NCLT Grants Go First 90 Day Extension For Insolvency Resolution

Go First Airlines, a bankrupt carrier attempting to resume operations, was given a 90 day extension by the National Company Law Tribunal (NCLT) on Thursday, 23 November, for its Corporate Insolvency Resolution Process (CIRP), which is currently in force from 6 November to 4 February.

The tribunal has requested a 90 day action plan from the resolution professional (RP) in charge of Go First's bankruptcy.

The Committee of Creditors of the grounded airline, which included Bank of Baroda, Central Bank of India, and IDBI Bank as major shareholders, voted in favor of the CIRP extension with a unanimous vote.

This action provides a little reprieve for Go First, which has been plagued by legal disputes with aircraft lessors and issues stemming from government orders affecting asset recovery during the moratorium.

The airline has received an expression of interest (EoI) from one prospective resolution applicant (PRA), who has until November 21 to submit a formal resolution plan, despite these obstacles and a lackluster response from possible acquirers.

The PRA needed today's delay to submit its plan because the CIRP period ended on 6 November. The RP stated that they will start a new bidding procedure if they do not receive a resolution plan from interested parties.

The tribunal has issued a warning, stating that liquidation procedures may be initiated if the CIRP is not completed within the extended deadline.

A few lessors challenged the extension, pointing out that the RP was not moving forward or having a clear plan. However, the RP stated that lessors lack the local standing to challenge such decisions, which are the responsibility of the Committee of Creditors.

Meanwhile, Jindal Power, founded by billionaire Naveen Jindal, reportedly withdrew their proposal after reviewing the airline's financial accounts, despite the company's initial interest.