New Delhi: After more than a week of uncertainties, the skies seem to be more clear for the cash-starved airline Go First as the National Company Law Tribunal (NCLT) on Wednesday admitted Go First's voluntary plea to initiate the insolvency resolution process against the airline.
NCLT relief for troubled Go First, airline cancels all tickets till May 19 | 10 points
National Company Law Tribunal (NCLT) has put the company under the protection of moratorium and directed the suspended board of directors to assist the IRP to run the company during insolvency proceedings.
Go First says NCLT order on its plea for insolvency proceedings is a historic ruling
Here are the top updates in this big story:
- A two-member bench comprising President Justice Ramalingam Sudhakar and L N Gupta also appointed Abhliash Lal as interim resolution professional (IRP) to run the debt-ridden company. It has put the company under the protection of moratorium and directed the suspended board of directors to assist the IRP to run the company during insolvency proceedings.
- The NCLT also directed the company to give Rs 5 crore to IRP to meet immediate expenses for insolvency process. Besides, NCLT also ordered to keep the company as a going concern and ensure that no employees are retrenched.
- According to the order, IRP has been asked to take necessary steps including execution of the arbitral awards, keep it as a going concern and run its services smoothly.
- On the moratorium sought by the airline, the bench said, "The necessity of going into the merits of the application is that the Section 10 is already been admitted in respect of the corporate applicant and the moratorium is already being initiated."
- According to the Insolvency and Bankruptcy Code (IBC), the effect of such an interim moratorium is that all pending legal proceedings with respect to any 'debt' are deemed to have been stayed.
- On May 4, the NCLT reserved its order after hearing the Wadia group-owned carrier and its aircraft lessors who have opposed the petition seeking interim protection. Go First, which has been flying for more than 17 years, stopped flights from May 3 amid financial crunch caused by grounding of more than half of its fleet due to non-availability of Pratt & Whitney engines.
- Go First has cancelled all its flights until May 19 this year, citing operational reasons. Earlier, the cancellations were till May 12. "We regret to inform that due to operational reasons, Go First flights scheduled till 19th May 2023 have been cancelled. We apologise for the inconvenience caused by the flight cancellations." The airline said a full refund would be issued to the original mode of payment shortly.
- With liabilities worth Rs 11,463 crore, the airline has sought voluntary insolvency resolution proceedings as well as an interim moratorium on its financial obligations.
- After the NCLT decision, Go First Chief Executive Officer Kaushik Khona said, "This is a historic ruling as an application of insolvency has been admitted so fast. The order prevents a viable airline from becoming an unviable one. The purpose of IBC has always been revival."
- Aviation regulator DGCA had on Monday issued a show cause notice to the troubled budget carrier "for their failure to continue the operation of the service in a safe, efficient and reliable manner", and directed it to immediately stop bookings and sale of tickets directly or indirectly till further orders.
Also read: Travel agents' body urge Go First to process ticket refunds using money in credit shell
New Delhi: After more than a week of uncertainties, the skies seem to be more clear for the cash-starved airline Go First as the National Company Law Tribunal (NCLT) on Wednesday admitted Go First's voluntary plea to initiate the insolvency resolution process against the airline.
Here are the top updates in this big story:
- A two-member bench comprising President Justice Ramalingam Sudhakar and L N Gupta also appointed Abhliash Lal as interim resolution professional (IRP) to run the debt-ridden company. It has put the company under the protection of moratorium and directed the suspended board of directors to assist the IRP to run the company during insolvency proceedings.
- The NCLT also directed the company to give Rs 5 crore to IRP to meet immediate expenses for insolvency process. Besides, NCLT also ordered to keep the company as a going concern and ensure that no employees are retrenched.
- According to the order, IRP has been asked to take necessary steps including execution of the arbitral awards, keep it as a going concern and run its services smoothly.
- On the moratorium sought by the airline, the bench said, "The necessity of going into the merits of the application is that the Section 10 is already been admitted in respect of the corporate applicant and the moratorium is already being initiated."
- According to the Insolvency and Bankruptcy Code (IBC), the effect of such an interim moratorium is that all pending legal proceedings with respect to any 'debt' are deemed to have been stayed.
- On May 4, the NCLT reserved its order after hearing the Wadia group-owned carrier and its aircraft lessors who have opposed the petition seeking interim protection. Go First, which has been flying for more than 17 years, stopped flights from May 3 amid financial crunch caused by grounding of more than half of its fleet due to non-availability of Pratt & Whitney engines.
- Go First has cancelled all its flights until May 19 this year, citing operational reasons. Earlier, the cancellations were till May 12. "We regret to inform that due to operational reasons, Go First flights scheduled till 19th May 2023 have been cancelled. We apologise for the inconvenience caused by the flight cancellations." The airline said a full refund would be issued to the original mode of payment shortly.
- With liabilities worth Rs 11,463 crore, the airline has sought voluntary insolvency resolution proceedings as well as an interim moratorium on its financial obligations.
- After the NCLT decision, Go First Chief Executive Officer Kaushik Khona said, "This is a historic ruling as an application of insolvency has been admitted so fast. The order prevents a viable airline from becoming an unviable one. The purpose of IBC has always been revival."
- Aviation regulator DGCA had on Monday issued a show cause notice to the troubled budget carrier "for their failure to continue the operation of the service in a safe, efficient and reliable manner", and directed it to immediately stop bookings and sale of tickets directly or indirectly till further orders.
Also read: Travel agents' body urge Go First to process ticket refunds using money in credit shell
Last Updated : May 10, 2023, 3:32 PM IST
