India's Wadia Group stays away from Go First insolvency process - sources

Central Bank of India

12/10/2023 11:01

By Siddhi Nayak
       MUMBAI, Oct 12 (Reuters) - 
    Go First's former owner, the Wadia Group, has not shown an
intent to bid for the grounded Indian airline and has stayed
away from the insolvency process so far amid an ongoing legal
tussle, three sources told Reuters.
  
    Cash-strapped Go First filed for bankruptcy in May, blaming
"faulty" Pratt & Whitney engines for the grounding of about half
its fleet.
        Two banking sources said on Thursday the conglomerate
has not submitted an expression of interest (EoI) - the first
step towards making financial bids - for the airline or hinted
at any plans to do so despite a company executive telling
Reuters in May that the group had no plans to exit.
    "They have not been in touch with banks for the last one
month," said a banker with a state-run lender which has loaned
money to Go First.
        A third source involved in the insolvency process said
while the law does not prohibit the Wadia Group from joining the
process at a later stage, there was no current indication it
would do so.  
    None of the sources wanted to be identified because they
were not authorised to speak to the media. The Wadia Group did
not immediately respond to a Reuters request for comment. 
    On Wednesday, Reuters reported Go First has received an EoI
from power generation company Jindal Power. The absence of the
Wadia Group from the process would limit choices for creditors
to find qualified investors.
    The Go First bankruptcy filing lists Central Bank of India
 CBI.NS , Bank of Baroda  BOB.NS , IDBI Bank  IDBI.NS  and
Deutsche Bank  DBKGn.DE  among its creditors, to whom the
carrier owes a total of 65.21 billion rupees ($784.60 million).
    While the Wadia Group was initially keen to revive the
airline, they have "completely gone silent now" since a "lot of
things have changed on ground," one of the bankers said,
referring to the legal proceedings.
    Foreign aircraft lessors of Go First are locked in a tussle
with the company after they were blocked from repossessing
planes due to a moratorium imposed by Indian courts.
    The Indian government amended its insolvency law earlier
this month to exclude leased aircraft from assets that can be
frozen, but it is yet to be determined whether the amended law
would apply retrospectively to Go First.

 (Reporting by Siddhi Nayak; Editing by Nivedita Bhattacharjee)
 ((Siddhi.Nayak@thomsonreuters.com; +91 22 6921 7848; Reuters
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