The National Company Law Tribunal (NCLT) will hear cash-strapped airline Go First's voluntary insolvency resolution plea on Thursday (May 4). The Delhi bench of NCLT headed by President Justice Ramalingam Sudhakar will hear the voluntary insolvency resolution plea of Go First, reported PTI.
The report said that the NCLT has agreed to an urgent hearing of the matter and has directed to list the matter for Thursday's hearing.
On Tuesday, the Wadia group-owned Go First moved to the NCLT, Delhi, seeking voluntary insolvency resolution proceedings. The airline had filed the plea under section 10 of the Insolvency & Bankruptcy Code (IBC). It allows a debtor to initiate an insolvency resolution process against itself if it has committed any default.
Go First has become the second major scheduled airline, following Jet Airways, to file for resolution under insolvency proceedings.
The airline has been facing issues with its engines since January 2020 and has filed a plea with the National Company Law Tribunal (NCLT) after Pratt & Whitney (P&W) refused to comply with an order from the Singapore International Arbitration Centre (SIAC). The emergency arbitrator had ordered P&W to release and dispatch at least 40 serviceable spare leased engines to the airline by April 27, and another 10 spare leased engines per month until December 2023.
Also Read: Go First Bankruptcy: Airline Owes Financial Creditors $798 Million, Shows Filing
On Wednesday, news agency Reuters reported that Go First owes financial creditors Rs 6,521 crore ($798 million), according to its bankruptcy filing. As of April 30, Go First had not defaulted on any of these dues, the filing said.
Despite the infusion of Rs 3,200 crore by the promoters into the airline in the last three years, GoFirst had to take this step to protect the interests of all stakeholders. The airline had to ground almost half of its A320neo fleet due to the serial failure of Pratt & Whitney's engines, resulting in lost revenues and additional expenses worth Rs 10,800 crore.