GoFirst’s creditors vote for liquidation of the airline report
06 Aug 2024
The Committee of Creditors (CoC) overseeing the debt resolution process of insolvent carrier Go First decided to vote for liquidation of the airline as the committee could not make any headway 15 months after the airline filed for bankruptcy.
The resolution process is facing an impasse as the creditor banks could not secure any worthwhile offer for takeover of the airline, reports citing people associated with the development said.
Of the two potential bidders for the failed airline, a consortium of SpiceJet promoter Ajay Singh and EaseMyTrip’s Nishat Pitti backed out early on, leaving Sharjah-based Sky One as the line suitor.
While CoC is proceeding with the filing of a liquidation application with the National Company Law Tribunal, the insolvency resolution professionals continue to pursue Go First’s arbitration process against aircraft engine supplier Pratt & Whitney at the Singapore Court of Arbitration.
Go First's debt resolution professional and creditors have squarely blamed Pratt & Whitney for failing to replace faulty engines, which resulted in grounding nearly half of the airline’s fleet of aircraft and subsequent halting of entire operations.
Go First's creditors are seeking over $1 billion in damages from Pratt & Whitney for failure to replace aircraft engines on time, forcing the airline to stop operations.
Go First moved its bankruptcy petition on 2 may accusing Pratt & Whitney’s International Aero Engines, LLC of deliberate neglect even as the number of failing engines mounted, resulting in the grounding of 25 of the airline’s aircraft.
P&W’s failure to replace faulty engines brought about a loss of over Rs10,000 crore to Go First, chairman of the airline and Wadia Group, Nusli Wadia, said last year.
