Published 14:58 IST, April 30th 2024

Lenders weigh liquidation for Go First amid aircraft repossession order

With debts totalling Rs 6,521 crore, owed to creditors, the airline faces a significant financial burden.

Reported by: Business Desk
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Go First | Image: Go First

Go First bankruptcy: Lenders to grounded airline Go First are deliberating over the fate of the bankrupt airline, contemplating options such as liquidation following a court ruling permitting aircraft lessors to reclaim their planes, news agency Reuters reported, quoting two banking sources familiar with the matter.

The recent court order, allowing lessors to repossess their aircraft, has severely impacted the airline's prospects, leaving little hope for revival, as stated by one of the bankers involved.


With debts totalling Rs 6,521 crore, owed to creditors including Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank, the airline faces a significant financial burden.

The Committee of Creditors (CoC) convened on Monday, with another meeting scheduled for Thursday, indicating a critical juncture in the decision-making process regarding Go First's future.


While two bids have been submitted under the formal bankruptcy process, one from a consortium led by SpiceJet's managing director Ajay Singh and Busy Bee Airways, and the other from Sharjah-based Sky One, the fate of these bids remains uncertain.

Jaideep Mirchandani, Chairman of Sky One, expressed confidence in their bid's viability, stating that the de-registration of aircraft does not alter their plans for the Indian aviation industry. Mirchandani stressed Sky One's ability to leverage its experience as lessors to run and rejuvenate Go First.


On the other hand, Ajay Singh and Busy Bee's majority shareholder Nishant Pitti have not yet responded to inquiries seeking comment on their bid.

However, lenders may opt to reject the current bids, citing dissatisfaction with the offered sums. The bids, which include the value of a land parcel pledged as collateral by Go First's promoters, have not met the lenders' expectations, according to the report.


In light of the prevailing circumstances, liquidation appears to be the most feasible course of action. This option will likely be subject to a vote by the committee, either upon formal rejection of the bids or if the applicants withdraw their offers, the report added.

(With Reuters inputs.)


14:58 IST, April 30th 2024