Go First insolvency crisis: Wadia group may offer one-time settlement offer to banks
Go First crisis: The airline, in its plea at NCLT, sought a resolution professional for the turnaround of the airline and sought an interim moratorium. The tribunal reserved its order for Go First.
- May 5, 2023,
- Updated May 5, 2023 11:49 AM IST
Go First insolvency: The owner of Go First airlines, the Wadia group, is reportedly likely to press for a one-time settlement with banks. This move would be part of the company’s resolution plan for the airline that filed for voluntary insolvency proceedings.
According to a report by the Financial Express, a one-time settlement with banks indicates that financial creditors would have to take a substantial haircut.
The airline filed its petition under Section 10 of the Insolvency and Bankruptcy Code that allows a debtor to initiate an insolvency resolution process against itself in case of default. The report, citing legal experts, said that since the Wadia group has not defaulted, it will not be barred from offering a resolution plan.
Meanwhile, in an interview with Reuters, Go First CEO Kaushik Khona said that the Wadia group has no plans to exit the airline. This is in reference to reports stating that the Wadia group is in talks with strategic partners to either sell a majority stake or completely exit it, compounded by its insolvency proceedings and cash crunch.
Khona told the agency that the Wadia group, particularly Nusli Wadia, always tried to see that the company and the operations continue on a normal basis despite the fact that they were “completely disabled to that extent by Pratt & Whitney”.
"There is no question of Wadia group having any intention to exit or move out," he had said. The group that owns 100 per cent of Go First pumped Rs 290 crore into the airline in April.
In its National Company Law Tribunal application, the airline blamed its financial situation, to a great extent, to Pratt & Whitney. It said that Pratt & Whitney supplied “inherently defective engines and failed to provide requisite and satisfactory maintenance, resulting in breach of its agreements with the airline, and grounding of a majority of Go First’s fleet, which had a cascading effect on the airline’s finances. The airline said that it faced losses to the tune of Rs 10,800 crore in the form of revenue and additional expenses.
The airline, in its plea at NCLT, sought a resolution professional for the turnaround of the airline and sought an interim moratorium. The tribunal reserved its order for Go First.
Also read: Go First at NCLT: What are the airline’s allegations against Pratt & Whitney?
Also read: Wadia Group committed to Go First; no sale of tickets till May 15: CEO Kaushik Khona
Go First insolvency: The owner of Go First airlines, the Wadia group, is reportedly likely to press for a one-time settlement with banks. This move would be part of the company’s resolution plan for the airline that filed for voluntary insolvency proceedings.
According to a report by the Financial Express, a one-time settlement with banks indicates that financial creditors would have to take a substantial haircut.
The airline filed its petition under Section 10 of the Insolvency and Bankruptcy Code that allows a debtor to initiate an insolvency resolution process against itself in case of default. The report, citing legal experts, said that since the Wadia group has not defaulted, it will not be barred from offering a resolution plan.
Meanwhile, in an interview with Reuters, Go First CEO Kaushik Khona said that the Wadia group has no plans to exit the airline. This is in reference to reports stating that the Wadia group is in talks with strategic partners to either sell a majority stake or completely exit it, compounded by its insolvency proceedings and cash crunch.
Khona told the agency that the Wadia group, particularly Nusli Wadia, always tried to see that the company and the operations continue on a normal basis despite the fact that they were “completely disabled to that extent by Pratt & Whitney”.
"There is no question of Wadia group having any intention to exit or move out," he had said. The group that owns 100 per cent of Go First pumped Rs 290 crore into the airline in April.
In its National Company Law Tribunal application, the airline blamed its financial situation, to a great extent, to Pratt & Whitney. It said that Pratt & Whitney supplied “inherently defective engines and failed to provide requisite and satisfactory maintenance, resulting in breach of its agreements with the airline, and grounding of a majority of Go First’s fleet, which had a cascading effect on the airline’s finances. The airline said that it faced losses to the tune of Rs 10,800 crore in the form of revenue and additional expenses.
The airline, in its plea at NCLT, sought a resolution professional for the turnaround of the airline and sought an interim moratorium. The tribunal reserved its order for Go First.
Also read: Go First at NCLT: What are the airline’s allegations against Pratt & Whitney?
Also read: Wadia Group committed to Go First; no sale of tickets till May 15: CEO Kaushik Khona