NCLT grants Go First 60-day moratorium extension

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Bankrupt airline Go First received a sigh of relief as the National Company Law Tribunal (NCLT) granted a 60-day extension of the moratorium to complete the corporate insolvency resolution process (CIRP) on Tuesday.

The extension period, effective from 4 February 2024, to 4 April 2024, grants the airline a total of 330 days to finalize the resolution process, with more than 270 days spent under the CIRP.

The resolution professional (RP) informed the court that they have received interest from three prospective resolution applicants (PRA) and that these applicants have deposited funds, hence seeking an extension to complete the process.

RP counsel informed the NCLT that the committee of creditors has unanimously approved the decision to seek an extension of 60 days.

Under the Insolvency and Bankruptcy Code (IBC), if the resolution professional seeks an extension of up to 60 days, the NCLT can allow it as that will extend the overall IBC-mandated 330-day limit.

Mint had reported it first on 4 February of Go First likely to get another 60-day extension in the moratorium period to complete the insolvency process.

Go First has filed this plea in NCLT for an extension of the corporate insolvency resolution process after completing its initial 90-day extension, which expired on 4 February. While this extension allows the grounded airline more time for revival, it may further delay the return of aircraft to lessors, who have sought repossession before various courts.

Go First filed for bankruptcy protection in May 2023, blaming Pratt & Whitney engine failures for its financial woes. It has since failed to fly again due to challenges posed by lessors or administrative challenges such as frequent changes of benches in the NCLT. The last effective hearing was in November.

Despite the extension of the moratorium, Go First’s future remains uncertain, with no resolution plan emerging in over 270 days of the insolvency resolution process. However, there’s been interest from potential buyers, including SpiceJet promoter Ajay Singh, Sharjah-based aviation company Sky One, and lesser-known Busy Bee, all of whom have submitted the required bank guarantee and expressed formal interest in acquiring the beleaguered airline.

Earlier, Jindal Power, owned by billionaire Naveen Jindal, showed interest but reportedly withdrew its bid after assessing the airline’s financial statements.

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Published: 13 Feb 2024, 01:10 PM IST

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