Go First Gets Insolvency Cover, Tribunal Orders No Sacking Of Employees
In a major relief for the struggling budget airline Go First, the National Company Law Tribunal (NCLT) today admitted its voluntary plea to initiate an insolvency resolution process, which is aimed at restructuring debt and liabilities.
Calling the order a “perfect example” in the context of reviving a viable business before it becomes unviable, Go First CEO Kaushik Khona told news agency PTI that it was “historic”. The crucial decision comes at a time when foreign lessors, including major global names such as Jackson Square Aviation, SMBC Aviation Capital, and CDB Aviation’s GY Aviation Leasing, are trying to repossess 40 Go First planes over missed rental payments. Any such recoveries are prohibited once bankruptcy proceedings are initiated for a company.
A two-member bench appointed Abhliash Lal of Alvarez & Marsal as interim resolution professional, who will take over management of the airline with immediate effect. This is the first time an Indian airline has voluntarily sought bankruptcy protection to renegotiate its contracts and debts.
The NCLT ordered that the company be kept functioning and none of its 7,000 employees be laid off.
It has also put the company under the protection of a moratorium and directed the suspended board of directors to assist the IRP in running the company during insolvency proceedings. (Source NDTV)