Go First likely set for liquidation as creditors unanimously decide to end insolvency process: Report

The National Company Law Tribunal (NCLT) had previously extended the insolvency resolution process for the debt-ridden airline until August 3.

The Committee of Creditors (CoC) for the now-defunct airline Go First has unanimously decided to proceed with liquidating the company, as bids from prospective resolution applicants did not meet expectations, a source familiar with the matter told Business Standard.

A senior executive from a private bank, which holds a minor stake in the airline, confirmed to Business Standard that the voting for the liquidation proposal has concluded, and the recommendation for liquidation will be submitted shortly. He noted, however, that the timeline for further actions will hinge on the legal proceedings at the tribunal.

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The National Company Law Tribunal (NCLT) had previously extended the insolvency resolution process for the debt-ridden airline until August 3. The NCLT had directed the CoC and the resolution professional to adhere strictly to this deadline, with no further extensions permitted. A consortium comprising SpiceJet promoter Ajay Singh, EaseMyTrip promoter Nishant Pitti, and Sharjah-based Sky One had initially shown interest in submitting a resolution plan for Go First. However, Singh and Pitti subsequently withdrew from the process.

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Go First filed for voluntary bankruptcy in May of the previous year. Since then, the airline's lessors have been embroiled in legal battles with the airline, lenders, and the resolution professional to reclaim their aircraft. On April 26, the Delhi High Court ordered the Directorate General of Civil Aviation (DGCA) to deregister planes leased to Go First within five working days, providing significant relief to the lessors.

Go First's financial obligations amount to approximately Rs 6,200 crore. Among its secured creditors are the Central Bank of India, Bank of Baroda, and IDBI Bank, with admitted claims of Rs 1,934 crore, Rs 1,744 crore, and Rs 75 crore, respectively.