NCLT extends Go First's resolution timeline by 90 days

New Delhi: The National Company Law Tribunal (NCLT) on Thursday granted Go First airline a 90-day extension for its Corporate Insolvency Resolution Process (CIRP), now effective from 6 November to 4 February, as the bankrupt carrier seeks to revive its operations.

The tribunal has asked the resolution professional (RP) overseeing Go First's insolvency to submit a 90-day action plan. 

The grounded airline's Committee of Creditors, with significant stakes held by Bank of Baroda, Central Bank of India, and IDBI Bank, unanimously supported the CIRP extension.

The move offers temporary respite for Go First, battling by legal tussles with aircraft lessors, and complications arising from government decrees impacting asset reclamation during the moratorium. Despite these challenges and a tepid response from potential acquirers, the airline has obtained an expression of interest (EoI) from one prospective resolution applicant (PRA), who has until 21 November to submit a formal resolution plan.

Given that the CIRP period expired on 6 November, today's extension was necessary to allow the PRA to submit its plan. The RP noted that if no resolution plan is received from interested parties, they will initiate a fresh bid process.

The tribunal has warned that the failure to conclude the CIRP within the new timeframe may trigger liquidation proceedings. 

Some lessors contested the extension, criticizing the RP's lack of progress and clear strategy. The RP, however, said that such decisions are within the Committee of Creditors' purview, and that lessors do not have the local standi to oppose it.

Meanwhile, despite initial interest from Jindal Power, owned by billionaire Naveen Jindal, the firm has reportedly withdrawn its bid after evaluating the airline's financial statements.