Go First insolvency: NCLT extends deadline by 60 days to complete resolution process

Go First crisis: The National Company Law Tribunal has extended the deadline for the completion of the resolution process of beleaguered airline Go First by 60 days. The resolution professional had sought an extension of the deadline to complete the corporate insolvency resolution process (CIRP). 

A two-member bench of the Delhi-based NCLT admitted the plea of resolution professional. 

The counsel, appearing for the RP, argued that so far three parties have submitted their expression of interest for Go First and have also deposited earnest money. These firms are expected to submit resolution plans for Go First. The three firms in question are budget carrier SpiceJet, Sharjah-based Sky One, and African continent-focused firm Safrik Investments. 

The tribunal had earlier, in November last year, granted an extension of 90 days, which ended on February 4. 

According to the  Insolvency & Bankruptcy Code (IBC), the CIRP has to be completed within 330 days, including the time taken for litigations. If the process is not completed within this maximum limit, then the corporate debtor is sent for liquidation. 

On May 10, NCLT admitted the plea of Go First to initiate voluntary insolvency resolution proceedings. Go First stopped flying on May 3.         

Meanwhile, lenders of the airline had set January 31 as the deadline for financial bids to acquire Go First. Lenders have more recently been considering liquidating the airline after failing to secure new investors. "Banks have decided to give the resolution process another go and allow those suitors who have shown prior interest a chance to submit a concrete bid," a banker with a state-run bank that has exposure to Go First told Reuters.

The airline had reportedly also reportedly floated a company to liaise with the leasing companies as it gets targeted by contempt petitions from aircraft lessors over non-disclosure of plane documents. Go First’s resolution professional said, in letters to aircraft lessors, that the new company has been formed by ‘certain Go First’ employees for the collation of aircraft records and documents. 

Also read: Go First's lenders set January 31 as deadline for investor bids, claims report

Also read: Go First forms company to deal with aircraft leasing firms: Report