To facilitate the revival of the bankrupt airline Go First, the National Company Law Tribunal (NCLT) has approved another 60-day extension for its moratorium. The extension, effective from April 4 to June 3, aims to provide more time for the airline to complete its corporate insolvency resolution process (CIRP) while giving priority to the interests of stakeholders.
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Unanimous Approval by the Committee of Creditors (COC)
The decision to extend of Resolution Process came after a petition by the Resolution Professional which received unanimous approval from the Committee of Creditors (CoC). The CoC comprising institutions like the Central Bank of India, Bank of Baroda, and IDBI Bank supported the extension in its meeting on March 29th.
Exception under Insolvency and Bankruptcy Code
Under the provisions of the Insolvency and Bankruptcy Code (IBC), an extension of up to 60 days can be granted by the NCLT, bypassing the standard 330-day limit, if considered necessary. This flexibility, contained in the Supreme Court judgment in the Essar Steel case, allows tailored extensions in special circumstances.
Although Go First has benefited from this additional exemption, it is unlikely that a further extension will be granted by the NCLT. The NCLT stressed the need for expeditious resolution and directed the resolution professional to conclude the process within the extended time frame.
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Two Bidders in the Fray
Amidst these proceedings, 2 financial bids have emerged for the revival of Go First Airline. One bid has been made jointly by SpiceJet’s Ajay Singh and Busy Bee, while the other bid has been made by Sharjah-based Sky One Aviation. These bids are important milestones in Go First’s journey towards restructuring and revival.
Troubled Past and Ongoing Challenges
Formerly backed by the Wadia Group, Go First went bankrupt on 2 May 2023 and ceased operations the next day due to alleged engine problems with Pratt & Whitney. Since then, the airline has been grappling with legal and administrative hurdles, including disputes with lessors and the fluidity of the NCLT hearing schedule.
As Go First tackles these challenges, stakeholders remain hopeful for a successful resolution that paves the way for its return to the skies.
