Go First insolvency resolution gets 60-day extension from NCLT

Go First gets another breather from NCLT

The National Company Law Tribunal (NCLT) on February 13 extended by 60 days the Corporate Insolvency Resolution Process (CIRP) of the grounded airline Go First after it was told that three parties had shown interest in  taking over the carrier.

The Resolution Professional (RP) of the airline told the NCLT that three parties have so far shown interest in taking over Go First.

Appearing for RP, Diwakar Maheshwari told NCLT that all the three parties had deposited earnest money after submitting their expression of interest, thus the airline's lenders have voted by an overwhelming majority to extend the CIRP. According to the RP, these three parties are expected to submit their resolution plan to revive the airline by February 15.

In December 2023, it was reported that India's budget airline Spicejet, Sharjah-based Sky One company, and Africa-focused Safrik Investments have shown interest in buying Go First.

This is the second extension granted to the airline after it was admitted to the insolvency resolution process in May 2023. On November 23, 2023, the NCLT had granted an extension of 90 days till February 4.

The 60-day extension begins February 4. This is the last extension the NCLT can grant to the airline as the CIRP has to be completed in 330 days.

If the airline finds no takers even after 330 days, it is most likely to go into liquidation.

Go First insolvency at NCLT

On May 2, 2023, Go First filed a plea in the NCLT under Section 10, asking to be admitted to the Corporate Insolvency Resolution Process . On May 10, the NCLT admitted the plea and appointed a resolution professional to run the affairs of the company.

Go First’s aircraft lessors, however, filed an appeal against the NCLT order in the National Company Law Appellate Tribunal (NCLAT). It said  their assets had unfairly been taken from them as they had terminated the leases before the moratorium.

The corporate affairs ministry issued a notification exempting aviation leases from the moratorium. This, coupled with a change in the bench, led to the case being deferred.

The Director General of Civil Aviation (DGCA), however, filed an affidavit in the Delhi High Court clarifying that the notification exempting aviation leases from moratorium under the Insolvency and Bankruptcy Code, 2016 should apply to pending cases as well.