Lenders of Go First Seek Complete Control over Resolution Process, Proposing Replacement of Key Bankruptcy Officials
In a significant development, lenders of Go First have taken steps to assume complete control over the airline’s resolution process by replacing key bankruptcy-related officials who were originally appointed by the company. This decision was made during the first committee of creditors (CoC) meeting held on Friday, where the lenders made changes to the positions of the interim resolution professional, process advisor, and legal agency, all of whom were initially appointed by the company.
According to a report published in The Economic Times, the committee of creditors (CoC) overseeing the resolution process of Go First has replaced Abhilash Lal, who was appointed by the company and backed by Alvarez & Marsal, with Shailendra Ajmera, who is supported by EY. This decision was made during the recent CoC meeting, reflecting the lenders’ intention to bring in professionals with a different perspective and expertise to handle the airline’s resolution process.
According to reports, there is a likelihood of Alvarez & Marsal being replaced by EY as the process advisor for Go First’s resolution process. This potential change indicates the committee of creditors’ intention to bring in EY to provide advisory services and leverage their expertise in navigating the complex financial restructuring of the airline.
As per the report, the legal advisor for the Interim Resolution Professional (IRP) in the Go First resolution process, Trilegal, is also expected to be replaced. Several firms, including Shroff & Co, Luthra & Luthra, and Cyril Amarchand Mangaldas, are reportedly being considered as potential replacements for this role.
According to a source cited by the daily, the changes in advisory firms are being implemented due to the lenders’ apprehensions about continuing with the same support firms appointed by the company. This decision indicates the lenders’ desire to introduce fresh perspectives and expertise into the resolution process of Go First.
According to the report, the committee of creditors is seeking to avoid any potential conflict of interest by replacing any company or advisor that has even remote connections with the promoters or management of Go First. This decision indicates the committee’s commitment to ensuring an impartial and unbiased resolution process.
Go First, the airline that initiated voluntary insolvency proceedings with the National Company Law Tribunal (NCLT), has disclosed liabilities amounting to Rs 11,463 crore. As part of its bankruptcy filing with the NCLT, Go First has stated that it owes a total of Rs 6,521 crore ($797.38 million) to its financial creditors, which include Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank.
The bankers involved in the resolution process of Go First are reportedly concerned about the potential impact of delays in the airline’s operations resumption. They express apprehension that prolonged delays could undermine public trust and result in key employees resigning from their positions. It is worth noting that Go First has already cancelled all flights until June 14.
Conclusion
In conclusion, the lenders of Go First are taking decisive actions by replacing key bankruptcy-related officials appointed by the company and seeking full control of the resolution process. This demonstrates their commitment to actively driving the proceedings and safeguarding the interests of stakeholders. By appointing industry experts, the lenders aim to expedite the resolution, maximize recovery efforts, and pave the way for the airline’s revival. Moving forward, a collaborative approach involving all stakeholders will be crucial to achieving a successful resolution.
