NCLT extends Go First's moratorium period till Feb 4, demands resolution plan within 90 days

The National Company Law Tribunal has extended the Corporate Insolvency Resolution Process (CIRP) of the cash-strapped airline Go First by 90 days till February 4, 2024. The Committee of Creditors (CoC) said the six-month moratorium period ended on November 6.

On October 17, it passed a resolution to extend the resolution process by 90 days. The 90-day period has already started from November 6, 2023, and will extend till February 4, 2024. 

The NCLT has asked the embattled airline to submit an action plan within the stipulated period of time. The tribunal said that if the airline fails to complete the resolution process in this 90-day period, it would initiate the liquidation process of the company.

Go First's Resolution Professional informed the tribunal that there is one prospective bidder for the airline.

On Tuesday, Naveen Jindal-led Jindal Power informed that it will not go ahead with its bid to take over low-cost carrier Go First, Reuters reported. The deadline to submit the bids ended on November 21.

Jindal Power and Jettwings Airways, a northeast-based low-cost regional airline, were the only bidders, and had put in expressions of interest (EoIs) for Go First in October. The Wadia group, founders of Go First, were allowed to participate in the EoI process but didn't submit any bid.

On Thursday, Go First's Resolution Professional informed the tribunal that there is one prospective bidder for the airline. However, they did not submit the resolution plan till November 21, which was the deadline set for the resolution plan. 

He said that the CoC has passed a resolution for seeking this extension by a 100 per cent vote.

Earlier this month, the Directorate General of Civil Aviation (DGCA) said that aircraft and engines leased can be deregistered and returned to their lessors exempting them from moratorium under the Insolvency and Bankruptcy Code (IBC).

In July, the DGCA said that it had received applications from lessors for deregistration of the entire fleet of Go First comprising 54 aircraft.

Go First insolvency timeline

The beleaguered airline, which stopped flying on May 3, submitted its plea for Corporate Insolvency Resolution Process (CIRP) on May 2, 2023. The tribunal admitted Go First’s insolvency plea on May 10, and appointed a Resolution Professional (RP) to run the affairs of the company.

Go First owes to Rs 6,521 crore to its lenders led by Central Bank of India, Bank of Baroda, IDBI Bank and Deutsche Bank. Central Bank of India, with an exposure of around Rs 2,000 crore to Go First, declared the account a non-performing asset (NPA) in October. Bank of Baroda, which has an exposure of 1,200 crore, followed suit to declare its loans as NPA.

In between, Go First’s aircraft lessors filed an appeal against the NCLT order in the National Company Law Appellate Tribunal (NCLAT) noting that their assets had been taken from them even after they had terminated the leases before the moratorium.

Also read: Go First might move towards liquidation; airline yet to find bidder: Report

Also read: Central Bank of India shares in focus as bank classifies Go First loans as NPAs