Twist in Go First insolvency: Busy Bee Airways challenges liquidation
In an unexpected turn of events in the Go First insolvency case, Busy Bee Airways Private Limited, a previous bidder for the airline, has filed a plea against the National Company Law Tribunal (NCLT).
The plea challenges the NCLT’s decision to reserve its order on the liquidation plea on 18 December.
However, the NCLT had already issued its liquidation order for Go First on 20 January (Monday), while the plea by Busy Bee Airways was listed for hearing on Tuesday.
Busy Bee Airways, majority-owned by Nishant Pitti and linked to SpiceJet chairman and managing director Ajay Singh, had previously expressed interest in acquiring the insolvent airline but withdrew its bid after Go First was left without any operational aircraft.
The company was incorporated on 19 April 2017 in Delhi with a paid-up capital of ₹1 lakh, according to data from the Ministry of Corporate Affairs.
Also read: Go First’s airport slots may be up for grabs for rivals soon
Media reports suggest that the consortium of Ajay Singh and Nishant Pitti has recently increased its bid for Go First to approximately ₹1,800 crore, compared to its earlier offer of ₹1,600 crore. The group has also raised its upfront payment proposal to ₹500 crore from ₹290 crore, along with plans to use proceeds from an arbitration case against engine manufacturer Pratt & Whitney to settle debts owed to financial creditors.
This bid was submitted in their personal capacities, while another bid was made by Jaideep Mirchandani-owned Sky One Airways.
However, the latter bid was reportedly withdrawn after the Delhi High Court ruling on 26 April, which allowed lessors to repossess all 54 Go First aircraft on lease, leaving the airline without planes and rendering it an unviable asset.
Path ahead
With the NCLT having already passed the liquidation order, the tribunal is expected to direct Busy Bee Airways to withdraw its plea. This would leave the company with the option to challenge the liquidation order at the National Company Law Appellate Tribunal (NCLAT).
Also read: Mint Explainer: The Cape Town connection to the Jet Airways, Go First insolvencies
Airline owes a total of ₹6,521 crore to its lenders, including Bank of Baroda, Central Bank of India, Deutsche Bank, and IDBI Bank. Central Bank of India holds the largest exposure at ₹1,987 crore, followed by Bank of Baroda with ₹1,430 crore, Deutsche Bank at ₹1,320 crore, and IDBI Bank with ₹58 crore.
Go First, promoted by the Wadias, filed for voluntary insolvency before the NCLT in May 2023. The struggling airline attributed its decision to issues with Pratt & Whitney, claiming that the rising frequency of engine failures caused by the US-based firm’s International Aero Engines left it with no choice but to seek insolvency protection.
