NCLT Order To Initiate Insolvency Resolution Proceedings 'Landmark, Historic': Go First CEO

CEO Kaushik Khona said that It is also a perfect example "in the context of revival of a viable business before it becomes unviable"

Go First in a tweet stated that due to operational reasons all flights until May 19, 2023, are cancelled. ( Image Source :Getty )

After the National Company Law Tribunal (NCLT) on Wednesday admitted Go First's voluntary plea to initiate insolvency resolution proceedings, Go First CEO Kaushik Khona has called the decision as a "landmark judgement" that is very timely and effective for its revival.

The CEO of the cash-strapped airline told PTI that this is a historic and landmark judgment. Khona said that It is also a perfect example "in the context of revival of a viable business before it becomes unviable." He also said the order is very timely and effective.

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. 

Go First had filed for the voluntary insolvency resolution proceedings on May 2. 

The tribunal in its order also put the company under the 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 employees are retrenched.

Meanwhile, the airline in a tweet stated that due to operational reasons, Go First flights until May 19, 2023, are cancelled.

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.

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.