Go First’s plea for insolvency resolution process has been accepted by the National Company Law Tribunal (NCLT). The airline, which is owned by the Wadia group, has been facing financial difficulties due to the grounding of over half of its fleet caused by non-availability of Pratt & Whitney engines. With liabilities of around Rs 11,463 crore, Go First had sought voluntary insolvency resolution proceedings and an interim moratorium on its financial obligations.
The NCLT has appointed Abhliash Lal as interim resolution professional (IRP) to oversee the debt-ridden company. The suspended board of directors has been directed to cooperate with the IRP to run the company during insolvency proceedings. The NCLT has also put the company under protection of a moratorium and ordered that it be kept as a going concern to ensure that no employees are retrenched. In addition, the IRP has been instructed to take necessary steps, including execution of the arbitral awards, to run the company’s services smoothly.
The NCLT’s decision was made after hearing the carrier and its aircraft lessors who opposed the petition seeking interim protection. Go First had stopped its flights on May 3 due to its financial crisis. As a result, it has already suspended the sale of tickets until May 15. At present, more than half of the airline’s fleet is 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, stating that it would have “harmful and serious consequences”. In addition to this, Go First is also facing two more petitions seeking insolvency proceedings against it.