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Go First forms company with former employees to liaise with leasing firms: Report

Crisis-hit Go First has reportedly floated a company to liaise with the leasing companies. The company was floated in December and is being led by Sachin Naik, a former employee in Go First’s finance department.

According to a report in the Economic Times, Go First’s resolution professional said, in letters to aircraft lessors, that the new company has been formed by ‘certain Go First’ employees for the collation of aircraft records and documents. In the letter, the resolution professional stated that Go First could also assist the lessors to engage MROs (maintenance, repair, overhaul firms) through Naik for carrying out required maintenance of the aircraft.

According to a lawyer, representing one of the lessors, most lessors have agreed to the “tripartite arrangement”. The lawyer told the daily that under IBC norms, the resolution professional is responsible for the upkeep of the assets but since Go First has no money or staff, the lessors will bear the cost of maintenance.

Go First’s resolution professional (RP) Shailendra Ajmera had earlier said the airline’s lessors were blocking it from reviving its operations by filing petitions seeking the de-registration of its aircraft.

On October 12, the Delhi High Court asked Go First’s resolution professional to share crucial documents related to the aircraft within a week. However, DAE (SY22) 13 Ireland Designated Activity Company, a unit of DAE Capital, filed a complaint with the court accusing the airline of wilfully refusing the court’s order. DAE, as well as other lessors have said that they did not get any access to any document. They have also expressed their concerns that the aircraft were in a state of decay, and remained ill-maintained and uncovered during the rainy season.

The case gets all the more complicated as India’s bankruptcy laws protect assets from being deregistered for a company under insolvency proceedings. The NCLT admitted the airline under the corporate insolvency process on May 10 last year.

In November last year, the airline told the Delhi High Court that it had exhausted the funds provided by the Committee of Creditors and was dealing with a shortage of manpower. The airline was given Rs 100 crore from CoC for service maintenance costs.

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