The National Company Law Tribunal (NCLT) in Delhi today admitted the application filed by Go First Airlines seeking initiation of voluntary insolvency proceedings.
The President Justice Ramalingam Sudhakar and technical member LN Gupta pronounced the verdict today and declared a full halt for the company.
The Tribunal appointed by Abhishek Lal, backed by Alvarez and Marsel, as an interim resolution professional (IRP) till the Committee of Creditors (CoC) appoints the resolution professional.
Therefore, it also directed the company’s suspended board of directors to cooperate with the interim resolution professional.
Earlier, Go Airlines moved the NCLT this month to bring out the corporate insolvency resolution process under the Insolvency and Bankruptcy Code (IBC).
It mentioned that due to faulty engines supplied by American company Pratt & Whitney (P&W), the grounding of its aircraft increased from 31% in the year 2020 to more than 50% in April, 2023.
They claimed that this cost the company a loss of over ₹10,800 crore.
However, in their petition filed through Advocate Pranjal Kishore, the airline company submitted that as of date, it has paid ₹19,980 crore to its lenders. Adding that a sum of ₹11,463 crore was owed to its creditors which include banks, financial institutions, vendors & aircraft lessors.
On April 28, 2023, it was pointed out that the company defaulted on payment of ₹1,202 crore to its creditors and ₹2,660 crore to the airport lessors.
As for an urgent relief, Senior Advocate Neeraj Kishan Kaul appeared for Go Airlines and sought for the imposition of an interim moratorium to prevent lessors from taking possession of its 26 aircrafts.
He reasoned that if the company drops the possession of aircraft and legal right to operate them, the prolongation of its business will be at its stake. The company claimed that, this would impact the employment of 7,000 direct & 10,000 indirect employees as well as debt repayment to creditors.
The coram reserved the plea after an extensive hearing on May 4.
On May 7, the airline company approached the NCLT seeking an urgent decision on its application seeking a temporary moratorium.
Senior Advocate P Nagesh notified the Tribunal that aircraft lessors accompany steps with the Directorate General of Civil Aviation (DGCA) to take possession of their aircrafts.
The Tribunal assured the counsel that it would consider the request and listed the plea for pronouncement today.
