India's Jindal Power Ltd, the only company whose expression of interest to take over Go First was accepted by creditors, has decided to not follow through with a bid, three people familiar with the plans said, pushing the insolvent airline closer to liquidation.
The deadline to submit takeover bids ends on Tuesday, and the sources told Reuters Jindal had decided against bidding after evaluating the airline's financial statements.
While the deadline can be extended via an application to the courts, creditors are currently not inclined to do so, two banking sources said.
"The EoI was largely to check the valuation of the airline and get access to the company's data," said one of the sources. "After evaluation, the company has decided not to put in a bid."
The sources declined to be identified as they were not authorised to speak to the media.
Jindal Power and Go First's resolution professional did not reply to emails seeking comment.
Go First filed for voluntary insolvency in May and owes a total of Rs 6,521 crore ($785.6 million) to its creditors.
Bankers had pinned their hopes on Jindal's interest, said a banker at a lender that has exposure to Go First.
"But it looks like that hasn't materialised," the banker added, declining to be named as he was not authorised to speak to the media.
The Central Bank of India, Bank of Baroda, IDBI Bank and Deutsche Bank are among the top creditors to the airline.
The Committee of Creditors will meet on Wednesday to decide the future course of action, said another banker. He also declined to be named as he was not authorised to speak to the media.
Both bankers said the liquidation of the airline was now the most likely option as there were no serious bidders.
Banks are already evaluating a property that is held as collateral with lenders in case of liquidation, one of the bankers said.
Go First is currently locked in a legal tussle with its lessors after they were blocked from repossessing planes due to a moratorium imposed by Indian courts.
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A recent amendment to India's insolvency rules allows lessors to take back the planes, but a court has yet to determine whether this change can be applied retrospectively to Go First.