Creditors Nod For Fresh Bids For Go First
The creditors of the defunct airline Go First Airlines have agreed to consider new proposals from prospective resolution applicants after receiving no submissions in a previous process that ended in November. All creditors unanimously voted to allow fresh proposals. Five entities have shown interest in taking over the airline.
Three of these entities, Sharjah-based aviation company Sky One, Africa-focused Safrik Investments and budget airline SpiceJet, submitted expressions of interest (EoIs) last month. Two other entities, US-based NS Aviation and Plan IT, which is a consortium of individuals, have also expressed interest in submitting proposals, according to two people familiar with the process.
Several entities have expressed interest in the grounded airline, TruJet. These entities will need to provide a bank guarantee of Rs 5 crore and a formal EoI to participate in the process. Creditors are willing to consider these new applicants and see what they have to offer. SpiceJet, a domestic carrier, is considered a serious contender.
NS Aviation, which acquired an 85 per cent stake in TruJet last June, has also announced its intention to submit a plan. Plan IT, another interested party, did not meet the Rs 1,000 crore net worth criteria in the first round, but plans to bring on a European investor to meet the criteria this time around.
It is unclear which of these entities will ultimately submit a bank guarantee and a formal proposal. The resolution professional, Shailendra Ajmera, called for a vote after receiving unsolicited interest from these entities last month. Additionally, the CIRP can be extended by two months.
A person familiar with the development said that the RAs (resolution applicants) will likely be granted an additional week to submit formal Eols (expressions of interest) and bank guarantees. Detailed plans can still be submitted until the current deadline of February 4 and may be extended depending on the seriousness of the applicants.
Go First, the airline in question owes more than Rs 6,200 crore to creditors. Among the secured creditors are the Central Bank of India, Bank of Baroda and IDBI Bank with admitted claims of Rs 1,934 crore, 1,744 crore and 75 crore respectively.
The corporate insolvency resolution process (CIRP) can be extended by another 60 days by the RP (resolution professional) and still comply with the insolvency code's outer deadline of 330 days after the current timeline ends on 4 February 2024. However, lenders remain doubtful of strong bids, given Go First's struggles for more than nine months amidst a tussle with aircraft lessors and a legal battle with engine maker Pratt & Whitney.
They are also doubtful about the financial position of the new bidders.
