India's Jindal Power will not bid to take over airline Go First -sources

Central Bank of India

21/11/2023 08:34

By Siddhi Nayak and Sarita Chaganti Singh
       MUMBAI, Nov 21 (Reuters) - India's Jindal Power Ltd, the
only company whose expression of interest to take over Go First
was accepted by creditors, has decided to not follow through
with a bid, three people familiar with the plans said, pushing
the insolvent airline closer to liquidation.
    The deadline to submit takeover bids ends on Tuesday, and
the sources told Reuters Jindal had decided against bidding
after evaluating the airline's financial statements.
    While the deadline can be extended via an application to the
courts, creditors are currently not inclined to do so, two
banking sources said.
    "The EoI was largely to check the valuation of the airline
and get access to the company's data," said one of the sources.
"After evaluation, the company has decided not to put in a bid."
    The sources declined to be identified as they were not
authorised to speak to the media. 
    Jindal Power and Go First's resolution professional did not
reply to emails seeking comment.
    Go First filed for voluntary insolvency in May and owes a
total of 65.21 billion rupees ($785.6 million) to its creditors.
    Bankers had pinned their hopes on Jindal's interest, said a
banker at a lender that has exposure to Go First.
    "But it looks like that hasn't materialised," the banker
added, declining to be named as he was not authorised to speak
to the media.
    The Central Bank of India  CBI.NS , Bank of Baroda  BOB.NS ,
IDBI Bank  IDBI.NS  and Deutsche Bank  DBKGn.DE  are among the
top creditors to the airline.
    The Committee of Creditors will meet on Wednesday to decide
the future course of action, said another banker. He also
declined to be named as he was not authorised to speak to the
media.
    Both bankers said the liquidation of the airline was now the
most likely option as there were no serious bidders.
    Banks are already evaluating a property that is held as
collateral with lenders in case of liquidation, one of the
bankers said.
    Go First is currently locked in a legal tussle with its
lessors after they were blocked from repossessing planes due to
a moratorium imposed by Indian courts.
    A recent amendment to India's insolvency rules allows
lessors to take back the planes, but a court has yet to
determine whether this change can be applied retrospectively to
Go First. 

 (Reporting by Siddhi Nayak in Mumbai and Sarita Chaganti Singh
in Delhi; editing by Miral Fahmy)
 ((Siddhi.Nayak@thomsonreuters.com; +91 22 6921 7848; Reuters
Messaging: Twitter: https://twitter.com/siddhiVnayak))