Beleaguered airline Go First’s lenders are reportedly set to put a vote to a proposal to liquidate the carrier after it received no proposal for revival. The committee of creditors (CoC) that met on Wednesday, the last date for prospective bidders to submit resolution plans, is more inclined towards a liquidation.
According to a report in The Economic Times that quoted people aware of the development, lenders believe that the airline will not find any buyers due to its legal and operational issues, and hence are inclined towards liquidation. The other option is to extend the resolution timeline, the source said.
Jindal Steel and Power promoter Naveen Jindal’s expression of interest (EOI) was the only preliminary inquiry to make it as a bidder but could not translate into a final bid. The person in the know said that Jindal neither bid nor asked for an extension of the timeline.
Go First lenders had extended the resolution timelines by another 90 days, and now believe that another further extension might not help in securing a deal.
Go First owes more than Rs 6,500 crore to its creditors, including Central Bank of India (Rs 1,987 crore) and Bank of Baroda (Rs 1,430 crore).
The airline’s plane lessors have already taken Go First to the Delhi High Court, seeking the deregistration of the planes, since the leases were terminated before the moratorium was declared on May 10.
Go First, is entangled in a legal tussle with engine maker Pratt & Whitney, that it has accused of providing faulty engines that were not replaced on time. This, the airline accused, led to the grounding of half of its fleet.
Also read: Go First revival plan still unclear, staff waiting for clarity on unpaid dues: Report