Go First’s Future in Jeopardy: Jindal’s Withdrawal Raises Liquidation Concerns

India’s Go First (GOW, Mumbai International) is facing the prospect of liquidation after Jindal Power Ltd decided not to submit a bid for the insolvent low-cost carrier. Despite participating in the expression of interest (EOI) process in September, Jindal Power Ltd has reportedly opted not to proceed with plans to acquire the airline, leaving Go First in a precarious situation.

“The expression of interest process was largely to check the airline’s valuation and get access to the company’s data,” revealed a source close to the talks. “After evaluation, the company has decided not to put in a bid.”

The deadline for prospective buyers to submit their bids was November 21. Go First ceased operations in May, filing for entry into India’s Corporate Insolvency Resolution Process. Creditors, including banks, lessors, employees, and other suppliers, have submitted claims totaling INR65.21 billion rupees (USD782 million). The banks, the largest creditors, had supported selling Go First to Jindal as the most promising option for recovering some or all of their outstanding amounts.

While several entities participated in the EOI process overseen by Go First’s resolution professional and the committee of creditors, Jindal’s bid was deemed the only suitable one. In the event that the committee decides on liquidation, Go First’s primary remaining asset is a 94-acre parcel of land in Thane, valued at approximately INR30 billion (USD360 million), which was given as collateral to the banks by Wadia Group (Go First’s owners). Notably, all of Go First’s aircraft are leased.

In a recent development, on November 23, the National Company Law Tribunal granted an extension of the bankruptcy resolution timeline by 90 days until February 4, 2024, following an appeal from Go First’s resolution professional. As the situation unfolds, the airline’s future hangs in the balance, with stakeholders closely watching the resolution process and potential outcomes for Go First. Stay tuned for updates on this evolving story.