Good news for bankrupt airline Go First as they have been granted a 60-day extension by the National Company Law Tribunal (NCLT) to sort out their financial troubles. The extension comes as a relief for the airline, allowing them more time to complete the corporate insolvency resolution process (CIRP).
This extension, effective from February 4 to April 4, gives Go First a total of 330 days to finalize their resolution process, with over 270 days already spent under the CIRP. The decision to grant the extension was made after the resolution professional (RP) informed the court about interest from three prospective resolution applicants (PRA) who have deposited funds, necessitating more time to complete the process.
The RP, representing Go First, also informed the NCLT that the committee of creditors has unanimously approved the decision to seek a 60-day extension. According to the Insolvency and Bankruptcy Code (IBC), such extensions can be granted by the NCLT, keeping within the overall IBC-mandated 330-day limit.
Go First filed for this extension after the expiry of its initial 90-day extension on February 4. While this extra time provides hope for the airline's revival, it may prolong the return of aircraft to lessors who have sought repossession before various courts.
The airline's financial troubles stem from Pratt & Whitney engine failures, leading to their filing for bankruptcy protection in May 2023. Despite efforts, Go First has been unable to resume operations due to challenges posed by lessors and administrative hurdles in the NCLT. The lack of a resolution plan after over 270 days of the insolvency process adds to the uncertainty surrounding Go First's future.
However, there are potential buyers showing interest, including SpiceJet promoter Ajay Singh, Sharjah-based aviation company Sky One, and Busy Bee. These parties have submitted bank guarantees and expressed formal interest in acquiring the troubled airline.
Earlier, Jindal Power, owned by billionaire Naveen Jindal, had shown interest but reportedly withdrew its bid after reviewing Go First's financial statements.
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