NEW DELHI:The National Company Law Tribunal (NCLT) on Wednesday granted a final 60-day extension to the bankrupt Go First airline to complete its corporate insolvency resolution process (CIRP).
This extension, which lasts until August 3, comes amid challenges and legal implications stemming from a Delhi high court ruling that deregistered all leased aircraft held by the airline. Additionally, some resolution plans are also under consideration.
This decision follows a previous extension that expired on 3 June, marking the second time an extension has been granted beyond the prescribed 330 days under the Insolvency and Bankruptcy Code (IBC).
The NCLT emphasized that no further extensions will be granted beyond 3 August, urging the bankrupt airline’s Committee of Creditors (CoC) and the resolution professional to adhere strictly to the deadline.
“We are not recording this in the order, but this is the final extension…Every time you seek extension…based on Essar Judgment. Every time Essar Judgment will not help,” the NCLT said.
The tribunal’s stance reflects the urgency to resolve the insolvency process, which has been complicated by legal judgments and evolving bidder interests.
The resolution professional’s counsel explained the necessity of the extension, citing the ongoing implications of the Delhi high Court judgment and the evolving bids from potential investors.
The CoC, which includes Central Bank of India, Bank of Baroda, and IDBI Bank Ltd, had unanimously approved the extension request in a meeting on 22 May. This move aims to accommodate the consideration of two remaining bids, one of which seeks a revision in light of the court’s judgment, while the other requires clarification.
Under India’s insolvency laws, the corporate resolution process must be completed within 180 days, with an option for a 90-day extension. The entire process is capped at 330 days, and any extensions beyond this period are granted only under exceptional circumstances.
The background
Go First, established in 2005 and previously backed by the Wadia Group, filed for insolvency on 2 May 2023, citing financial distress due to faulty engines supplied by Pratt & Whitney. The airline’s total liabilities to creditors amount to approximately ₹11,463 crore, encompassing dues to banks, financial institutions, vendors, and aircraft lessors.
The Delhi high court’s April order significantly impacted the airline, ordering the deregistration of all 54 leased aircraft, thus stalling any immediate revival prospects. This legal hurdle has led to changes in bidders’ positions, with one major bidder, EaseMyTrip, withdrawing to focus on core areas.
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Published: 12 Jun 2024, 01:10 PM IST
