Go First Receives Extended Deadline for Insolvency Resolution by India’s NCLT
India’s Go First airline has been granted an additional 60 days to finalize its insolvency resolution process, with the National Company Law Tribunal (NCLT) extending the deadline to June 3. This decision was made during an April 8 hearing, providing the administrator, or resolution professional, additional time to negotiate the sale of the struggling carrier.
The process involves complex negotiations with potential buyers, including Sharjah-based Sky One and a consortium led by Ajay Singh, the managing director of SpiceJet, and Nishant Pitti, CEO of EaseMyTrip. The need for an extension arose as Go First’s administrators sought more time from the NCLT to select a suitable buyer and finalize the sale details, as reported by ch-aviation.
India’s Insolvency and Bankruptcy Code typically allows a maximum of 330 days from the initiation of insolvency proceedings to reach a resolution. Originally, Go First’s deadline was set for April 4. However, the court acknowledged exceptional circumstances in granting the extension, with the two-judge bench indicating reluctance to allow further delays beyond this new deadline.
In parallel financial developments, lenders have seized a 94-acre land parcel in Thane, valued at approximately INR20 billion (USD240 million), which was collateralized by Go First’s parent company, Wadia Group. This move comes as creditors aim to recover funds, with the land’s value representing nearly one-third of the total claims against the airline.
The land is expected to remain a separate asset from the rest of the airline’s holdings, with a possession notice expected soon, followed by due diligence and valuation processes leading up to a potential auction within the coming month. This strategic approach by the lenders underscores the complexities involved in handling significant insolvency cases such as that of Go First, reflecting the challenges of balancing creditor recovery with the ongoing efforts to rescue the airline.