Go First To Seek 60-Day Extension For Insolvency Resolution; Potential Suitors Emerge Amidst Talks

Go First, formerly known as GoAir, is set to seek a 60-day extension for its insolvency resolution process, legal experts predict. The grounded airline's initial 90-day extension, granted by the National Company Law Tribunal (NCLT), expired on February 4.

Go First, which filed for bankruptcy protection in May 2023, citing Pratt & Whitney engine failures as the primary cause of its financial woes, has encountered multiple hurdles in its quest for revival. Despite the challenges posed by lessors and administrative roadblocks in the NCLT, the airline has managed to attract interest from potential investors.

The airline's troubles escalated when it failed to present a viable revival plan, leading to the NCLT granting a 90-day extension, which concluded on Sunday. With this expiration, Go First has completed 270 days of the insolvency resolution process, and the impending decision on the extension will determine whether the airline can stage a comeback or face the possibility of liquidation.

Legal experts suggest that Go First is entitled to seek an extension of up to 330 days, and the impending 60-day extension could be the final opportunity for its resolution professional to devise a revival strategy. Beyond this limit, liquidation may become the only viable option, although there is speculation that the NCLT might grant extensions even beyond the 330-day limit under exceptional circumstances.

Despite the prolonged insolvency proceedings, no concrete resolution plan has surfaced, leaving the fate of Go First hanging in the balance. However, the airline has garnered interest from potential buyers, injecting a dose of optimism into its otherwise grim situation.

Among the entities expressing interest in Go First, SpiceJet promoter Ajay Singh, Sharjah-based aviation company Sky One, and the lesser-known Busy Bee have submitted a Rs 5-crore bank guarantee along with a formal expression of interest to take over the grounded airline. These entities are stepping up to the challenge, eyeing an opportunity to revive the beleaguered carrier.

Earlier in the process, there was interest from Jindal Power, owned by billionaire Naveen Jindal. However, the firm reportedly withdrew its bid after a thorough evaluation of the airline's financial statements, leaving the field open for other potential rescuers.

While Go First strives for an extended lease on life, its lessors are grappling with the prolonged grounding of their aircraft and engines. The uncertainty surrounding the airline's future has prompted lessors to plead for the immediate repossession of their assets in both the NCLT and the Delhi High Court.

The additional 60-day extension, if granted, could further delay the return of aircraft to lessors, intensifying the financial strain on these stakeholders. The lessors have been vocal about their concerns, highlighting the economic impact of the extended grounding of their assets.

As Go First navigates the complexities of its insolvency resolution, stakeholders, including lessors, potential buyers, and the aviation industry at large, eagerly await the decision of the NCLT on the sought-after 60-day extension. The resolution professional overseeing Go First's insolvency faces a challenging task in formulating a plan that not only satisfies the creditors and lessors but also aligns with the regulatory framework.