Go First gets lifeline as NCLT extends moratorium, again
NEW DELHI : The National Company Law Tribunal (NCLT) on Monday approved another 60-day extension to the bankrupt Go First airline to complete its corporate insolvency resolution process (CIRP).
The extension will be effective till 3 June, and has been allowed keeping in mind the interest of stakeholders, as per the NCLT.
India’s insolvency laws mandate completion of a corporate resolution process in 180 days, extendable by another 90 days. However, it must be completed in no more than 330 days in total.
A previous extension, from 4 February to 4 April, exhausted the 330-day deadline to complete the resolution process. However, under exceptional circumstances, the NCLT agreed to give Go First another 60 days, as the resolution plans were nearing completion.
The resolution professional had filed a plea seeking another extension, which was unanimously approved by the committee of creditors (CoC), comprising Central Bank of India, Bank of Baroda, and IDBI Bank Ltd, in a meeting held on 29 March.
Under law, if the resolution professional seeks an extension of up to 60 days, the NCLT can allow it to push the process beyond the standard 330-day limit if deemed necessary.
The NCLT order drew upon a Supreme Court ruling in the Essar Steel case, which eliminated the “mandatory” 330-day deadline for insolvency and bankruptcy resolutions, thus allowing for special-case extensions.
It is, however, unlikely that the NCLT will grant further extensions in Go First’s case.
The court granted the extension after being informed that two resolution plans were being finalized. The tribunal has instructed the resolution professional to complete the process within the extended period.
Go First has received two financial bids: a joint bid by SpiceJet’s Ajay Singh and Busy Bee, and another by Sharjah-based Sky One Aviation.
Formerly backed by the Wadia Group, the airline filed for insolvency on 2 May, 2023 and suspended flights the next day, blaming failures of engines supplied by Pratt & Whitney.
Since then, the airline has been grounded, entangled in legal and administrative hurdles, including disputes with lessors and frequent changes in the NCLT’s hearing schedules.
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Published: 08 Apr 2024, 01:39 PM IST
Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.