Lenders to India's Go First vote for liquidating airline, sources say

Bank of Baroda

05/08/2024 04:12

By Siddhi Nayak
       MUMBAI, Aug 5 (Reuters) - Lenders to India's Go First
have decided to liquidate the company's assets after rejecting
bids by interested suitors to revive the bankrupt airline, two
banking sources said.
    Go First, which filed for bankruptcy in May last year, had
received two financial bids under the bankruptcy process.
    The Committee of Creditors has voted in favour of
liquidating the airline, the bankers said.
    Liquidation "is the best way forward" and "it makes no sense
to keep pumping in more money" to cover costs related to the
insolvency process, one of the bankers said.
    Emails seeking comments to Go First's resolution
professional, who conducts the bankruptcy process, did not
immediately get a response.
    The bankers did not wish to be identified because they were
not authorised to speak with the media.  
    Reuters had earlier reported that one of the two bidders had
raised its offer after a push by lenders. 
    "Bidders were given adequate time to review and raise their
bids, but even that fell short of lenders' expectations," the
first banker said. 
    The liquidation process will commence once all legal
formalities are completed, the second banker said. 
    Go First owes a total of 65.21 billion rupees ($781.14
million) to its creditors, which include Central Bank of India
 CBI.NS , Bank of Baroda  BOB.NS , IDBI Bank  IDBI.NS  and
Deutsche Bank  DBKGn.DE . 
    Foreign aircraft lessors of Go First were locked in a tussle
with the company after they were blocked from repossessing
planes due to a moratorium imposed by Indian courts. However, a
local court, in April, allowed lessors to take back their
planes. 
    "The court order was a major deterrent for bidders as there
was no value left in the airline," the second banker said. 
 ($1 = 83.4810 Indian rupees)

 (Reporting by Siddhi Nayak; Editing by Muralikumar
Anantharaman)
 ((Siddhi.Nayak@thomsonreuters.com; +91 22 6921 7848; X: https://twitter.com/siddhiVnayak))