Go First Crisis: NCLT Admits Airline's Insolvency Plea, Appoints IRP
The NCLT also asked the IRP to keep Go First as a going concern and not to retrench any employee
The National Company Law Tribunal (NCLT) in its judgment on Wednesday admitted Go First's voluntary plea to initiate insolvency resolution proceedings. A two-member bench comprising President Justice Ramalingam Sudhakar and L N Gupta appointed Abhliash Lal as interim resolution professional (IRP) to run the debt-ridden firm.
The bench has also put the company under protection of moratorium and directed the suspended board of directors to assist the IRP to run the company during insolvency proceedings. Besides, the NCLT also ordered to keep the company as a going concern and ensure that no employee are retrenched.
Go First CEO Kaushik Khona, on tribunal accepting its insolvency resolution plea, said, "The NCLT has passed a landmark, very timely order. The order is a perfect example in context of reviving a viable business before it becomes unviable."
Go First has already suspended the sale of tickets till May 15.
Meanwhile, the airline in a tweet stated that due to operational reasons, Go First flights until May 19, 2023 are cancelled.
Due to operational reasons, Go First flights until 19th May 2023 are cancelled, says the airline pic.twitter.com/16fPLSlo13
— ANI (@ANI) May 10, 2023
Go First, which has been flying for more than 17 years, stopped flights on May 3 amid a financial crunch caused by the grounding of more than half of its fleet due to the non-availability of Pratt & Whitney (P&W) engines.
The NCLT on May 4 reserved its order after hearing the Wadia group-owned carrier and its aircraft lessors who have opposed the petition seeking interim protection.
With liabilities worth Rs 11,463 crore, the airline has sought voluntary insolvency resolution proceedings as well as an interim moratorium on its financial obligations. As many as 28 planes or more than half of the airline's fleet are grounded due to the non-supply of engines by P&W.
The lessors of the carrier have opposed Go First's plea for an interim moratorium contending that it would have "harmful and serious consequences". Besides, Go First is facing two more petitions seeking insolvency proceedings against it.
Meanwhile, the Directorate General of Civil Aviation (DGCA) on Tuesday said that lessors of cash-strapped airline Go First have approached it to deregister 45 Go First Airways planes, reported by ANI. The airlines have a total strength of 55 planes.
The DGCA on Tuesday issued a show-cause notice to the airline for its failure to continue operations in a safe, efficient, and reliable manner. The aviation regulator had also asked them to stop selling any more air tickets with immediate effect until further orders.
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