Go First Insolvency: SMBC Aviation Capital Moves NCLAT Challenging NCLT Order

SMBC Aviation Capital, formerly RBS Aviation Capital, is one of the world's largest aircraft leasing companies

During the hearing at the NCLT last week, several aircraft lessors had opposed Go First's voluntary insolvency plea. 

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Aircraft lessor SMBC Aviation Capital Ltd on Wednesday moved appellate tribunal NCLAT against the order passed by the NCLT earlier in the day allowing Go First's voluntary plea to initiate insolvency proceedings, the PTI reported. According to the report, SMBC Aviation Capital, formerly RBS Aviation Capital, is one of the world's largest aircraft leasing companies.

Earlier in the day, the Delhi-based principal bench of the National Company Law Tribunal (NCLT) admitted Go First's voluntary plea to initiate the insolvency resolution process against the airline.

The tribunal appointed an interim resolution professional (IRP) while suspending the board and putting a moratorium on the debt-ridden company's financial obligations.

During the hearing at the NCLT last week, several aircraft lessors had opposed Go First's voluntary insolvency plea. 

A two-member NCLT bench comprising President Justice Ramalingam Sudhakar and L N Gupta appointed Abhliash Lal as interim resolution professional (IRP) to run the debt-ridden airline. 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."

The crisis-hit airline has already suspended the sale of tickets till May 15.

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.

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.