The National Company Law Tribunal (NCLT) on Wednesday (May 10) admitted Go First’s voluntary plea to initiate the insolvency resolution process against the airline.
A two-member bench comprising President Justice Ramalingam Sudhakar and LN Gupta also appointed Abhilash Lal as interim resolution professional (IRP) to run the debt-ridden company.
Also read: DGCA issues show cause notice to Go First; asks it to immediately stop sale of tickets
It 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.
“This is a historic ruling as an application of insolvency has been admitted so fast. The order prevents a viable airline from becoming an unviable one. The purpose of IBC has always been revival," says Go First CEO Kaushik Khona https://t.co/VQ7noNOotB
— ANI (@ANI) May 10, 2023
Besides, NCLT also ordered to keep the company as a going-concern and ensure that no employee is retrenched.
Aircraft lessors oppose plea for interim protection
On May 4, the NCLT reserved its order after hearing the Wadia group-owned carrier and its aircraft lessors who have opposed the petition seeking interim protection.
Go First, which has been flying for more than 17 years, stopped flights from May 3 amid a financial crunch caused by grounding of more than half of its fleet due to non-availability of Pratt & Whitney engines.
With liabilities worth ₹11,463 crore, the airline has sought voluntary insolvency resolution proceedings as well as an interim moratorium on its financial obligations.
Also read: From growth-wary to grounded: How Go First flew into rough weather
Go First has already suspended the sale of tickets till May 15.
As many as 28 planes or more than half of the airline’s fleet are grounded due to the non-supply of engines by Pratt & Whitney (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.
(With inputs from agencies)