 "Go First")
The recent Delhi High Court ruling permitting lessors to deregister and reclaim the 54 Go First aircraft has ended creditors' hopes of obtaining a favourable valuation for the now-defunct airline. Without these planes, there are few assets left for the airline to be sold as a viable entity, potentially disrupting the current bankruptcy proceedings with no prospect of revival.
The lenders will meet on Monday to determine the future course of action.
The Economic Times (ET) quoted a source saying, "The latest court order makes the airline unsustainable. There was very little value in the airline because of the time taken for this process; now even that is not there. Lenders will have to seriously consider whether there is any value left in continuing the process or whether it is better to concentrate recovery efforts on other viable options."
The High Court instructed the Directorate General of Civil Aviation (DGCA) on Friday to proceed with deregistering and surrendering all 54 aircraft to the lessors. Additionally, it mandated the resolution professional (RP) to furnish all relevant airline information to the lessors while prohibiting the airline from removing any documents or spare parts from the planes.
The court's ruling was prompted by a petition from the lessors, who sought to lift the moratorium on Go First's assets. The National Company Law Tribunal (NCLT) had imposed this moratorium following the former management's voluntary insolvency filing in May last year.
The lenders are currently placing their hopes on the arbitration proceedings underway in Singapore and a sizable land parcel in Thane as potential avenues for recovering some funds from the now-defunct airline. The lenders are additionally engaging in arbitration proceedings in Singapore with engine manufacturer Pratt & Whitney. They are continuing the process initiated by Go First's former management, aiming to claim over $1 billion from the company. The blame is directed at Pratt & Whitney for supplying defective engines that were not replaced on time, leading to the grounding of half of the airline's fleet and contributing to its bankruptcy.
Furthermore, a 94-acre land parcel situated in Thane, held as collateral by lenders, was claimed in symbolic possession earlier this month. Sources said that around Rs 2,000 crore could be expected if future development of the land is taken into account.
