The Aryavarth Express
Agency (New Delhi): Lenders to India’s bankrupt carrier Go First are seriously considering liquidating the airline this week after a court order allowed lessors to take back their planes, sources told Reuters, diminishing hopes of a viable revival plan.
The Committee of Creditors (CoC) representing Go First’s financial creditors like Central Bank of India, Bank of Baroda, IDBI Bank and Deutsche Bank met on Monday. Another meeting is scheduled for Thursday to discuss the way forward for the beleaguered airline.
“There is no value left in the airline after the court order and chances of revival seem very grim,” a banker involved in the process said on condition of anonymity. “Liquidation appears the most viable option under the present circumstances.”
Go First, which temporarily halted operations in early May, owes a staggering 65.21 billion rupees ($780 million) to its creditors. The National Company Law Tribunal (NCLT) had admitted the cash-strapped airline for insolvency resolution proceedings earlier this month.
So far, the airline’s resolution professional has received just two bids for Go First’s assets – one from a consortium comprising SpiceJet Managing Director Ajay Singh and Busy Bee Airways, and another from UAE’s Sky One FZE.
However, the lenders are dissatisfied with the bid amounts offered currently and may reject both proposals, the second source indicated. The bids include assigning value to a parcel of land pledged as collateral by Go First’s founders.
Jaideep Mirchandani, Chairman of Sky One FZE, said despite the deregistration of Go First’s leased planes, his company was prepared to bring in its own assets to revive the airline if its bid succeeded.
Go First’s troubles are symptomatic of the turbulence plaguing India’s aviation sector. It is the third airline after Jet Airways and Air Deccan to land in insolvency proceedings in recent years.
A final decision on whether to liquidate or continue efforts to find an investor willing to revive Go First rests with the airline’s creditors. If bids are formally rejected or bidders back out, liquidation will be put to a vote.