A GoFirst aircraft. file | Photo Credit: Reuters
National Company Law Tribunal agreed on 10 May GoFirst files for bankruptcy and provided protection under moratorium from recovery by lessors and lenders.
The court appointed Abhilash Lal from Alvarez & Marsal as the Insolvency Resolution Professional (IRP) and directed it to initiate insolvency process to allow the airline to continue as a going concern.
Kaushik Khona, CEO of GoFirst, described the NCLT judgment as a “landmark judgement” which is very timely and effective for its revival. This is a landmark and historic decision. “This is a perfect example in terms of revival of a viable business before it becomes unviable,” explained Mr. Khona. PTI.
The court has also directed that no employee should be retrenched.
The suspended board of governors of the airline will have to provide all support to the IRP and deposit an amount of ₹5 crore for initial expenses.
The airline is also awaiting the order of the National Company Law Tribunal on this. An interim moratorium on the bankruptcy petition and the safety of its aircraft From repossession by the lessees for non-payment of dues.
The airline has 28 of its 54 aircraft with what the airline called under-performing engines, due to delays in providing parts and servicing by engine manufacturer Pratt & Whitney. It has said that this has caused a loss of more than Rs 10,000 crore to the airline. The total outstanding dues of the airline to its various creditors is Rs 11,463.
on 8 may Aviation safety regulator orders GoFirst to stop selling air tickets immediatelyAnd also served it a show cause notice before deciding to cancel the airline’s permit to offer commercial flights.
(With PTI inputs)