GoFirst declared itself bankrupt on 2 May Image Credit source: Representative Photo
The hearing on the petition of Budget Airlines GoFirst to declare itself ‘insolvent’ with the National Company Law Tribunal (NCLT) has been completed. NCLT has reserved its decision on this. During the hearing, the company hoped for the survival of GoFirst and sought interim relief. Now it remains to be seen whether the company gets this relief in the decision of NCLT or not…
GoFirst declared itself bankrupt on May 2 and filed a petition in the NCLT to get this official stamp. With this, the company had announced to stop its flights service for the first 3 days, which has now been extended till May 9. At the same time, booking of new air tickets has also been banned till May 15.
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Will we be able to get ‘interim stop’ permission?
In its ‘bankruptcy petition’, GoFirst had sought permission from the NCLT to impose an ‘interim stay’ on running the company. On this, the NCLT has said that there is no provision for such restriction under the Insolvency and Bankruptcy Act (IBC).
NCLT reserves its order on budget airline Go First’s plea for insolvency resolution proceedings
— Press Trust of India (@PTI_News)
The company admitted in its plea that it is facing financial crisis. Due to Pratt & Whitney’s bad engine, the company is having trouble maintaining operations, but the company is expected to run properly again. That’s why the company has appealed to give him the relief of ‘interim stop’ for the time being.
Very bad condition of go first
Due to Pratt & Whitney’s faulty engine, about 30 of GoFirst’s 61 planes are not able to fly and are standing in hangars at different airports. The company has cited Pratt & Whitney’s failure to repair engines on time, not providing additional engines in exchange for faulty engines, as the main reason for its closure.
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Banks stranded more than 6000 crores
Bank of Baroda, Axis Bank, Central Bank of India, Bank of India and IDBI Bank also have to do with the decision of NCLT. This company of Wadia Group owes a total of Rs 6,521 crore to all these banks. At the same time, the company has also given a bank guarantee of Rs 500 crore to Indian Oil to buy jet fuel.