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Very little left to sell in Go First with planes gone

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The Delhi High Court order allowing lessors to deregister and take possession of the 54 Go First planes has all but ended hopes of a good valuation for creditors of the defunct airline, said people with knowledge of the matter. The lack of planes means there is very little in the airline to sell as a going concern, which could derail the ongoing bankruptcy process without hopes of any revival, they said. The lenders are likely to meet on Monday to decide the future course of action.
“The latest court order makes the airline unsustainable. There was very little value in the airline because of the time taken for this process; now even that is not there,” said one of the persons, who did not wish to be identified. “Lenders will have to seriously consider whether there is any value left in continuing the process or it is better to concentrate recovery efforts on other viable options.”

On Friday, the high court asked the Directorate General of Civil Aviation (DGCA) to deregister and hand over all the 54 planes to lessors. It also directed the resolution professional (RP) to provide all information regarding the airline to the lessors while restraining the airline from taking away any documents or spare parts from the planes.

The court’s order came in response to a challenge by the lessors seeking removal of moratorium on the assets of Go First imposed by the National Company Law Tribunal after the erstwhile management had filed a voluntary insolvency in May last year.

RP Shailendra Ajmera did not reply to ET’s email seeking comment.

Lenders are now pinning hopes on the ongoing arbitration proceedings in Singapore and a large land parcel in Thane for some recovery from the defunct airline. “The planes were anyway not owned by the company and were on lease. One way to look at it is that the maintenance of the planes could have raised the resolution process costs, eventually denting lenders’ recovery. The bids we have today are not very lucrative so in a way this order could end this painful recovery process and help us look towards other ways of recovery,” said another person aware of the process. Lenders are also pursuing arbitration proceedings in Singapore against engine maker Pratt & Whitney, continuing the process started by Go First’s erstwhile management seeking more than $1 billion from the company, blaming it for supplying faulty engines that were not replaced on time, resulting in the grounding of half the airline’s fleet and pushing it toward bankruptcy.Then there is 94-acre land parcel kept as collateral with lenders, located in Thane, symbolic possession of which was taken this month. At least ₹2,000 crore could be expected if future development of the land is taken into account, said people in the know.

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