The National Company Law Tribunal (NCLT) has admitted crisis-hit airline Go First’s plea for voluntary insolvency, and grants protection under moratorium from recovery by lessors and lenders, according to CNBC-TV18.
The NCLT also appointed Abhilash Lal as the interim resolution professional (IRP) to run Go First. It also directed IRP to maintain the status of the airline as a going concern. The NCLT also asked Go First not to retrench any employee.
The Go First management is also directed to deposit Rs 5 crore with IRP to meet expenses.
Go First had filed a plea for voluntary insolvency resolution proceedings before the National Company Law Tribunal (NCLT). It filed its petition under Section 10 of the Insolvency and Bankruptcy Code to initiate insolvency against itself. The plea is different from Sections 7 and 9 where the financial and operational creditors, respectively, take the corporate debtor to the National Company Law Tribunal (NCLT) in case of default in payment of dues.
On May 4, the NCLT reserved its order after hearing the Wadia group-owned carrier and its aircraft lessors who have opposed the petition seeking interim protection.
Go First, which has been flying for more than 17 years, stopped flights from May 3 amid financial crunch caused by grounding of more than half of its fleet due to non-availability of Pratt & Whitney engines.
With liabilities worth Rs 11,463 crore, the airline has sought voluntary insolvency resolution proceedings as well as an interim moratorium on its financial obligations.
Go First has already suspended the sale of tickets till May 15.
As many as 28 planes or more than half of the airline’s fleet are grounded due to the non-supply of engines by Pratt & Whitney (P&W). The lessors of the carrier have opposed Go First’s plea for an interim moratorium contending that it would have “harmful and serious consequences”.
Besides, Go First is facing two more petitions seeking insolvency proceedings against it.
(With PTI Inputs)
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