The NCLT (National Company Law Tribunal) on Wednesday admitted Go First's plea for voluntary insolvency and allowed for the initiation of CIRP (Corporate Insolvency Resolution Process) proceedings. It also granted Go First protection under a moratorium from recovery by lessors, and lenders. Go First, which has been flying for more than 17 years, stopped flights on May 3 amid a financial crunch caused by the grounding of more than half of its fleet due to the non-availability of Pratt & Whitney engines.
NCLT, in its judgement, said, "We admit the plea of Go Airlines for insolvency proceedings. It said that we appoint Abhilash Lal as IRP.." It also directed that the suspended Board of Directors will cooperate with the IRP.
The suspended directors were also ordered to deposit Rs 5 crore to meet the immediate expenses.
“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 a revival," said Go First CEO Kaushik Khona.
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