Summary
- Go First is looking for a 60-day extension to its insolvency process as a result of interest from potential investors.
- The airline initially lacked investor interest after its grounding, but recently attracted 4 candidates, including SpiceJet and NS Aviation.
- Go First has faced challenges currently, equivalent to worker departures and disputes with lessors.
India’s grounded low-cost carrier Go First is seeking to extend the insolvency process by one other two months, given the recent interest from a bunch of potential investors. The airline’s operations have remained suspended since May 2023, and any attempts to credibly bring it back to life have to this point not worked.
Playing by the principles
Go First is reportedly seeking to extend the period of its insolvency process by one other 60 days because it looks for a financial lifeline to resurrect its business. Based on Reuters, two banking sources have said that the airline wants more time, given the recent turn of events involving interest of potential investors.
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The airline is inside its rights to request an extension as India’s Insolvency and Bankruptcy Code says that the National Company Law Tribunal (NCLT) can stretch the timeframe of the resolution process to a maximum of 330 days.
Go First’s current deadline ends on February 4, when it would complete 270 days. Reuters quotes one among the bankers for a state-run bank as saying,
Investor interest
Within the months that followed Go First’s grounding, the carrier didn’t see much interest from any financier who could infuse money into the airline and restart its business. India’s Jindal Group had shown initial interest, but that didn’t materialize into anything.
Then, just as all hope was lost, Go First attracted interest from 4 candidates, one among them being its own competitor, the Indian budget carrier SpiceJet. Others included Sharjah-based company Sky One, Safrik Investment group of Africa, and US-based NS Aviation, a worldwide investor founded by a US-based surgeon, Dr Mohammad Ali, and entrepreneur Isha Ali. Last 12 months, it announced the acquisition of 85% shares of one other Indian airline, TruJet, for a bit over $54 million.
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In January, all 4 parties were informed to formally submit an EOI and a bid after that. After all, with all of the due diligence required in such cases, more time is required for the method, which is why Go First is looking for an extension of the deadline.
Last probability?
Soon after its grounding, Go First said that it was taken with restarting operations, and there have been various discussions concerning the reduced scale of operations for its comeback. But all this while, the airline was plagued with several issues, including employees leaving en masse and disputes with its lessors.
Go First Lessors Approach Court Over Inaccessibility To Aircraft Records
The court has asked Go First to reply by December 12.
Go First’s fleet is currently grounded throughout India, with reports of a few of them being in suboptimal conditions, provided that the airline currently has no employees to take care of them. All of this severely impacted its plans for restarting flights. It stays to be seen if any of those 4 candidates can successfully place a bid to rescue the carrier.
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