In a disheartening turn of events for Go First, the beleaguered Indian airline faces the imminent prospect of liquidation as lenders prepare to cast their votes on the company’s future. Following a failed bid process that concluded without any potential buyers stepping forward, the decision to dissolve the insolvent carrier is gaining traction among the creditors.
The situation unfolded as sources revealed that Go First’s creditors are set to deliberate on a proposal for the airline’s liquidation, as disclosed by banking insiders familiar with the matter. An unnamed banker from a state-run bank, part of Go First’s creditors, disclosed, “The proposal whether or not to liquidate the airline has been floated, and individual lenders will take the proposal to their boards and submit final votes in 10-15 days.”
The absence of interest from potential suitors has swayed banking institutions towards opting for liquidation over restarting the insolvency process. The Committee of Creditors convened over Wednesday and Thursday to chart the course of action for the airline’s future.
Key creditors, including Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank, stand among the significant stakeholders awaiting the decision. Despite Jindal Power’s initial expression of interest in taking over Go First, their decision to abstain from submitting a bid further compounded the airline’s woes.
“The lack of suitors and mounting legal hurdles are pushing banks towards the liquidation route,” mentioned a second banker involved in the proceedings. Notably, the presence of collateral linked to the loans further amplifies the rationale for liquidation, as opposed to investing additional funds in the protracted insolvency process.
Go First finds itself entangled in a legal battle with its lessors, as a court-issued moratorium hindered their efforts to reclaim leased planes. Although recent amendments to India’s insolvency regulations theoretically permit lessors to repossess aircraft, a conclusive court ruling is pending regarding the retrospective application of these changes to Go First’s case.
The airline’s resolution professional, overseeing the insolvency process, remained unavailable for immediate comment on the recent developments.
The cumulative debt burdening Go First stands at a substantial 65.21 billion rupees ($785.6 million), reflecting the magnitude of the financial strain on the now-defunct carrier.
As the fate of Go First teeters on the edge, the looming decision for liquidation marks a pivotal chapter in the troubled trajectory of the airline, signifying the potential end to efforts aimed at salvaging its operations amidst mounting challenges.
Sources By Agencies
