India's Go First lenders to vote on liquidation amid lack of suitors -sources (updated)

IDBI Bank

23/11/2023 17:08

(Adds source quote in paragraphs 10-11, creditors in paras 7-8,
other details and background from para 5)
    By Siddhi Nayak
       MUMBAI, Nov 23 (Reuters) - Go First's lenders will vote
on a proposal to liquidate the insolvent Indian airline, two
banking sources told Reuters on Thursday, days after a deadline
to bid for the company ended with no suitors.
    "The proposal whether or not to liquidate the airline has
been floated and individual lenders will take the proposal to
their boards and submit final votes in 10-15 days," said a
banker with a state-run bank that has exposure to Go First. 
    "It appears that there is no interest from suitors for the
airline and bankers are inclined to opt for liquidation rather
than restarting the insolvency process."
    The Committee of Creditors met on Wednesday and Thursday to
decide the future course of action for the airline.
    Neither of the bankers wished to be named because they were
not authorised to speak to the media.
    Go First's resolution professional, who is conducting the
insolvency process, did not immediately reply to an email
seeking comment.
    Go First, which filed for bankruptcy protection in May, owes
a total of 65.21 billion rupees ($785.6 million) to its
creditors.
    Central Bank of India  CBI.NS , Bank of Baroda  BOB.NS ,
IDBI Bank  IDBI.NS  and Deutsche Bank  DBKGn.DE  are among the
airline's creditors.
   Jindal Power, the sole company whose expression of interest
to take over Go First was accepted by creditors, also decided to
not follow through with a bid, Reuters reported.
    "Liquidation is the only viable option before banks as legal
troubles are deterring suitors," said the second banker.
    "Since there is (land) collateral backing the loan, it is
better to opt for liquidation rather than spending more money on
the insolvency process." 
    Go First is also locked in a legal tussle with its lessors
after a moratorium imposed by Indian courts blocked them from
repossessing planes.
    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; Editing by Susan Fenton, Kirsten
Donovan)
 ((Siddhi.Nayak@thomsonreuters.com; +91 22 6921 7848; Reuters
Messaging: Twitter: https://twitter.com/siddhiVnayak))