Lenders vote to liquidate defunct airline Go First due to low bids

The committee of creditors (CoC) of defunct airline Go First have unanimously decided in favour of liquidating the company as bids by prospective resolution applicants were below expectations, a source aware of the development, said.

A senior executive of a private bank, which has a small exposure to the airline, said voting for the proposal is through and the airline will be recommended for liquidation soon.

He added that it is difficult to give a timeline for any further process as it will depend on the legal process at the tribunal.

Previously, the National Company Law Tribunal (NCLT) had extended the insolvency process of the debt-laden airline until August 3. It had instructed the CoC and the resolution professional to adhere strictly to this deadline with no further extensions.

A consortium of SpiceJet promoter Ajay Singh and EaseMyTrip promoter Nishant Pitti along with Sharjah-based Sky One had expressed interest in providing a resolution plan for the airline. However, later Singh and Pitti decided to withdraw from the process. 

Go First had filed for voluntary bankruptcy in May last year.

Since then, lessors were battling with the airline, lenders and the resolution professional to take possession of their aircraft. 

Finally on April 26, the Delhi High Court directed the Directorate General of Civil Aviation (DGCA) to deregister planes leased to Go First within five working days. This provided the much-needed relief to lessors. 

Go First owes its creditors around Rs 6,200 crore. Central Bank of India, Bank of Baroda, and IDBI Bank are some of the secured creditors of the airline, with admitted claims of Rs 1,934 crore, Rs 1,744 crore, and Rs 75 crore, respectively.