Go First lenders discuss revival plan; appoints new resolution professional

Lenders however have opted for a new resolution professional as Lal was selected by the Go First management

Go First’s lenders on Friday discussed the grounded airline’s revival plan and appointed Shailendra Ajmera, of consultancy EY, resolution professional.
 

Go First had declared insolvency on May 2 owing to a cash crunch and its application was admitted by the National Company Law Tribunal (NCLT) on May 10.
 

The tribunal had confirmed Abhilash Lal of Alvarez & Marsal as interim resolution professional.

The lenders, however, opted for a new resolution professional because Lal had been selected by the Go First management. They also selected a resolution process advisor and legal counsel for the committee. All the resolutions were approved with a hundred per cent vote, it is learnt.
 

“The resolution professional’s appointment will first have to be confirmed by the NCLT. Applications for funds too will be made by him. Banks will take decisions based on merit, subject to their boards’ approval. However, banks in general are keen to see the airline restart operations. We will be able to recover only if the airline continues as a going concern,” said a senior executive of a lender.
 

Go First had earlier sought Rs 200 crore from banks to resume operations with 22 aircraft. This would be used as working capital for operational expenses.
 

“The banks have discussed the airline’s financing requirements internally. Their executives have met officials of the Directorate General of Civil Aviation (DGCA) and the civil aviation ministry to understand if it has regulatory support. We think the banks have got the comfort. Go First is confident of receiving support and funds from banks and would like to resume flights as soon as possible,” said an airline source.
 

In a resumption plan submitted to the DGCA, the airline said it had the requisite number of employees, including 675 pilots and a 1,300-strong cabin crew, to fly its 26 operational planes.
 

The resumption plan, however, faces a challenge from lessors, who have approached courts, seeking deregistration of aircraft or a restraint on the use of planes by Go First.
 

While the Delhi High Court has reserved its order on writ petitions on deregistration, the NCLT has admitted pleas from lessors that want a restraint on the use of planes and an inspection of aircraft engines.