A GoFirst aircraft. File
| Photo Credit: Reuters
The National Company Law Tribunal on May 10 admitted Go First’s plea for insolvency and granted protection under a moratorium from recoveries by lessors and lenders.
The court has appointed Abhilash Lal from Alvarez & Marsal as the Insolvency Resolution Professional (IRP) and directed the initiation of the insolvency process to allow the airline to continue as a going concern.
Go First CEO Kaushik Khona described NCLT’s decision as a “landmark judgement” that is very timely and effective for its revival. This is a historic and landmark judgement. It is also a perfect example “in the context of revival of a viable business before it becomes unviable,” Mr. Khona told PTI.
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The court has also directed that no employees be retrenched.
The suspended Board of Governors of the airline will have to provide the IRP all assistance and deposit a sum of ₹5 core for initial expenses.
The airline is also awaiting an order from the National Company Law Tribunal on its insolvency plea and an interim moratorium to protect its aircraft from being re-possessed by lessors due to non payment of dues.
The airline has 28 out of 54 aircraft grounded due to delays from engine maker Pratt and Whitney in providing spares and servicing, what the airline has called, under-performing engines. This, it has said, led to a loss of over ₹10,000 crore for the airline. The airline has total dues amounting to ₹11,463 to its various creditors.
On May 8, the aviation safety regulator ordered Go First to immediately stop selling air tickets, and has also served it a showcause notice before taking a decision to revoke the airline’s permit to offer commercial flights.
(With PTI inputs)
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