Go First Airline Lenders Contemplate Liquidation Option After Court’s Order On Planes

Go First Airline Lenders Contemplate Liquidation Option After Court’s Order On Planes

It owes Rs.65.21 billion ($780.88 million) to creditors

After a court order allowed lessors to take back their planes, the Committee of Creditors (CoC) of two banks met recently to discuss options, including liquidation, for Go First, the bankrupt Indian airline.

Even as the creditors plan to regroup shortly, a banker stated, "There is no value left in the airline after the court order and chances of revival seem very grim.” However, the bankers did not wish to be identified.

The airline owes Rs.65.21 billion ($780.88 million) to its creditors, including the Central Bank of India, Bank of Baroda, IDBI Bank and Deutsche Bank.

Early this year, Go First received two bids under the formal bankruptcy process. First, from a consortium including budget carrier SpiceJet's Managing Director Ajay Singh and Busy Bee Airways, and the second from Sharjah-based Sky One.

The chairman of Sky One, Jaideep Mirchandani stated that if the bid went in its favor, despite the deregistration of the leased planes, the company was prepared to bring in its assets and resources to revive the airline.

He told a news agency, "Our extensive experience as lessors and our comprehensive portfolio of aviation services uniquely position us to address the challenges and opportunities presented by Go First's situation.”

Meanwhile, unhappy with the sums offered by both applicants, the lenders may reject the bids, which include the value of a piece of land offered as collateral by the airline's promoters. The lenders had sought higher bids.

However, liquidation could be a viable option that would be put to a vote once the committee formally rejected the two offers, or if the applicants retracted.