NEW DELHI : In an attempt to revive bankrupt airline Go First, the National Company Law Tribunal (NCLT) on Monday approved another 60-day extension for its moratorium, aiming to give the airline additional time to finalize its corporate insolvency resolution process (CIRP).
The extension will be effective 4 April to 3 June, and has been allowed keeping in mind the interest of stakeholders, as per the NCLT.
An earlier extension, stretching from 4 February to 4 June, extended Go First’s timeline to 330 days to complete its resolution process.
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 the Insolvency and Bankruptcy Code (IBC), 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.
To be sure, draws 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 with effect from 3 May, blaming it on engine failures from 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