Go First Crisis: NCLT Extends Deadline By 60 Days To Finalise Resolution Process

This marks the second extension granted by the NCLT. Previously, on November 23 last year, the tribunal approved an extension of 90 days, which concluded on February 4

On May 10, the NCLT accepted Go First's request to commence voluntary insolvency resolution proceedings ( Image Source :Getty )

The National Company Law Tribunal (NCLT) on Tuesday granted a further extension of 60 days to finalise the resolution process of the grounded airline Go First. A two-member bench of the Delhi-based NCLT accepted the request filed by the resolution professional (RP) of Go First, seeking an extension of the timeline to conclude the corporate insolvency resolution process (CIRP).

Diwakar Maheshwari, representing the RP, stated that thus far, three parties have submitted their expression of interest for Go First and have also deposited the earnest money. These companies are anticipated to present resolution plans for Go First, which has been undergoing CIRP since May 10, 2023. The three companies interested in acquiring Go First include Spicejet, Sharjah-based Sky One, and African continent-focused firm Safrik Investments.

This marks the second extension granted by the NCLT. Previously, on November 23 last year, the tribunal approved an extension of 90 days, which concluded on February 4. The Insolvency and Bankruptcy Code (IBC) requires the resolution process to be finalised within 330 days, encompassing any time spent in legal proceedings.

Section 12(1) of the Code states that CIRP should be completed within 180 days. However, the absolute deadline for completing the CIRP, incorporating all extensions and periods of litigation, remains 330 days. Failure to meet this deadline results in the corporate debtor being subjected to liquidation.

On May 10, the NCLT accepted Go First's request to commence voluntary insolvency resolution proceedings. Go First stopped its operations on May 3.

In the meantime, the airline's lenders had initially established January 31 as the cutoff for financial bids to acquire Go First. However, with the inability to attract new investors, there has been a recent contemplation among lenders to liquidate the airline. "Banks have decided to give the resolution process another go and allow those suitors who have shown prior interest a chance to submit a concrete bid," a banker with a state-run bank with knowledge of the Go First matter told the news agency Reuters.